Japanese Mitsui Doesn’t Plan To Exit Russian Sakhalin-2 LNG

Japanese trading house Mitsui & Co doesn’t plan to exit its minority shareholding in the Sakhalin-2 LNG project in Russia as the export facility continues to export liquefied natural gas to Japan.

“We have decided last year to keep our stake in the Sakhalin-2 after consulting with the Japanese government as the project supplies about 9% of Japan's LNG imports,” Mitsui’s senior executive managing officer, Toru Matsui, said at the company’s annual general meeting, as carried by Reuters.

The Sakhalin-2 LNG project doesn’t have any operational issues and continues to export LNG to Japan, company representatives told the shareholders.

Most long-term LNG buyers of the Sakhalin-2 project, including from Japan and South Korea, have continued to buy gas from the venture, even though Western majors quit en masse operations in Russia after the Russian invasion of Ukraine in February 2022, including Shell, which said it would leave the project.

Utilities in Japan and South Korea continued to buy LNG from Sakhalin, citing energy security—and many of them have renewed their long-term deals.

A decree from Russian President Vladimir Putin stipulated last summer that a newly set up state Russian company would take over the rights and obligations of Sakhalin Energy Investment Co., the joint venture running the Sakhalin-2 oil and gas project. Shell and Japan’s Mitsui and Mitsubishi were minority shareholders in Sakhalin Energy Investment Co, whose biggest shareholder is Gazprom.

In early August, the Russian government gave Sakhalin-2 minority foreign investors – Shell, Mitsui & Co, and Mitsubishi – one month to claim their stakes in a new entity that will replace the existing project. Shell confirmed it was looking at ways to exit the project, while the Japanese companies kept their stakes.    

Mitsui, which has 12.5% in Sakhalin-2, said in November that the project had enough technical know-how to run operations without Shell.

By Tsvetana Paraskova for Oilprice.com

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