Govt asks Mitsubishi to consider investing in new Russian operator of Sakhalin 2

The Yomiuri Shimbun

13:53 JST, August 18, 2022

The government asked Mitsubishi Corp. to consider investing in the new Russian operator of the Sakhalin 2 oil and gas project in Russia’s Far East during a meeting between Economy, Trade and Industry Minister Yasutoshi Nishimura and Mitsubishi President Katsuya Nakanishi.

“We would like the public and private sectors to work together to protect Japan’s interests and ensure a stable supply of liquefied natural gas,” Nishimura told reporters on Wednesday.

Mitsubishi owns a 10% stake in the current operator Sakhalin Energy Investment Co., and Mitsui & Co. holds a 12.5% stake.

Russian President Vladimir Putin signed a decree ordering the transfer of the assets of the Sakhalin 2 project’s operators to a new company established by the Russian government.

The two Japanese trading houses have until Sept. 4 to notify the new company of their consent to hold shares in the project.

“I have not heard of any new conditions being proposed that would make it difficult to conclude a contract,” Nishimura said, indicating the government intends to support the Japanese firms in maintaining their interests in the project.

The new company has presented similar contract terms to some Japanese power utilities and others that had concluded LNG procurement contracts, according to sources.