Japan’s Mitsui nears decision to join new Sakhalin-2 operator -Nikkei

By Thomson Reuters Aug 19, 2022 | 11:15 PM

TOKYO (Reuters) – Japanese trading firm Mitsui & Co is close to making a final decision to join a new Russian operator for the Sakhalin-2 liquefied natural gas (LNG) project, the Nikkei newspaper said, without citing sources.

Registered on Aug. 5, the new entity replaces project operator Sakhalin Energy as Moscow rewrites the rules for foreign firms operating in Russia, amid global sanctionsfollowing its invasion of Ukraine.

Mitsui, which does not see any conditions that disadvantage it, will make a final decision by the end of this month and notify Russia, the paper added.

The company and peer Mitsubishi Corp, together held a stake of 22.5% in Sakhalin-2. The latter is still considering whether to join the project, the paper added.

The project is critical to the energy security of resource-poor Japan, which imports about a tenth of its LNG from Russia, mainly from Sakhalin-2. Japan has asked both companies to “think positively” in joining the new entity.

A Mitsui spokesperson declined to comment, beyond saying the firm was in talks.

Separately, JERA, a joint venture of Tokyo Electric Power Holdings and Chubu Electric Power, and Tokyo Gas has renewed contracts to buy LNG from Sakhalin-2, the paper said on Friday.

A JERA spokesperson declined comment. A Tokyo Gas spokesperson said nothing had been decided on the matter.

(Reporting by Junko Fujita, Miho Uranaka, Yuka Obayashi; Editing by Clarence Fernandez)