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Tokyo to protest discrimination of Japan holdings in Russian LNG

  • By Al Mayadeen English
  • Source: Agencies
  • 2 Jul 2022 23:51
  • 1 Shares
2 Min Read

Japan says Russia must honor contracts in the Sakhalin-2 oil and gas project.

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  • Sakhalin-2 accounts for 9% of Japan's LNG imports
    Sakhalin-2 accounts for 9% of Japan's LNG imports

A senior Japanese official told the Yomiuri Shimbun daily that Tokyo will protest any discrimination against the Mitsui and Mitsubishi holding companies in the Sakhalin-2 oil and gas project.

"Contracts with Japanese enterprises must be honored," the official in the Japanese Foreign Ministry was quoted as saying in an article published on Saturday. 

Russia's President on Thursday signed a decree that would allow Moscow to create a new operator that would take over the Sakhalin-2 project from Sakhalin Energy Investment Co.

In the change, Russia's Gazprom will keep a majority stake of 50% plus one share. Shell will sell its 27.5% stake, as it said it will, while Mitsui and Mitsubishi still plan to hold on to their stakes.

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The Japanese companies announced back in March that they will continue their participation in the Russian Sakhalin-2 project, in which their joint share amounts to 22.5 percent.

Japan’s interests in the project are significantly different from those of Europe. In particular, in early March, Mitsui and Mitsubishi sent documents to the Japanese Economy Ministry, which include statements about the risks of an early exit from the project, and this being “in interests of China.”

An earlier estimate by Nikkei said that around 60 percent of the liquefied natural gas (LNG) produced at Sakhalin-2 is intended for supplies to Japan, which constitutes most of the LNG deliveries from Russia to Japan.

Japan's Deputy Chief Cabinet Secretary Seiji Kihara said in a briefing of Japanese companies Friday that the government was still studying the contents of the decree. He further added that the interests of the companies in question must be respected.

The Sakhalin-2 project accounts for 9% of Japan's imports in LNG.

  • Japan
  • Russia
  • LNG
  • LNG development
  • Sakhalin-2

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