Japan needs Russian energy – Mitsui exec

Japanese trading house Mitsui & Co is not planning to withdraw from the Sakhalin-2 liquefied natural gas (LNG) project in Russia’s Far East, due to its importance in securing stable energy supplies, senior executive managing officer Toru Matsui announced on Wednesday.

“We have no plan to exit the project at the moment,” he explained at an annual general meeting, adding that the project was experiencing no issues with operations and continues to supply Japan with super-chilled fuel.

“We 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,” the executive said.

Mitsui, along with Mitsubishi, retained their 22.5% combined stake in the project, even as Western majors such as British Shell opted to leave Sakhalin-2 following the launch of Russia’s military operation in Ukraine. Other Asian long-term LNG buyers of the Sakhalin-2 project, including South Korea, have continued importing gas from the venture.

Last summer, Russia transferred the project from its Bermuda-based operator, Sakhalin Energy, to a domestic company, Sakhalin Energy LLC, and allowed foreign shareholders to retain their stakes in the new operator proportionate to their old stakes.

Shell, which owned 27.5% minus one share in Sakhalin Energy, gave notice that it would not be taking a stake in the new entity, while the two Japanese companies decided to retain their stakes and agreed to transfer their respective 12.5% and 10% holdings to the new operator. Russian state energy giant Gazprom owns 50% in Sakhalin Energy LLC.

Sakhalin-2 is one of the world’s largest LNG projects, supplying around 4% of the global market.

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