Japan’s Mitsubishi Corporation today officially announced its continued participation in Sakhalin-2, one of the largest integrated, export-oriented oil and gas projects as well as Russia’s first offshore gas project in its region. from the Far East.
Mitsubishi Corporation had submitted a notification letter to the Russian government regarding the equity investment in Sakhalin Energy LLC, a newly incorporated limited liability company under Russian law, to operate Sakhalin-2.
“We have now confirmed that the application has been approved by the government of the Russian Federation,” the multinational giant said in a statement on Thursday expressing the importance of the project in terms of energy security, such as stable electricity supply and in gas from Japan.
“We will discuss the terms and conditions of a shareholders agreement with the relevant parties and continue to assess the risks associated with the project, assuming various scenarios,” he added on his participation in the oil development project. and natural gas in Russia.
Sakhalin Energy LLC continues to supply LNG from Sakhalin-2 after Russian President Vladimir Putin issued a decree on June 30 to change the operator of Sakhalin-2 and create a new legal entity on August 5.
It will be receive all rights and obligations of the project instead of Sakhalin Energy Investment Company Ltd., the former operator of the project, owned by Gazprom, Shell, Mitsui and Mitsubishi.
The project infrastructure includes three offshore platforms, an onshore processing facility, 300 kilometers of offshore pipelines and 1,600 kilometers of onshore pipelines, an oil export terminal and a liquefied natural gas (LNG) plant.
Mitsui had also announced that it had given its consent on August 25 to take ownership of the shares of Sakhalin Energy LLC and had been informed of the Russian government‘s approval on August 30.
“We remain in discussion with stakeholders, including the Japanese government and trading partners, regarding possible future actions given energy supply needs, while respecting related international sanctions,” said the company’s president and CEO, Kenichi Hor.
Sakhalin-2 supplies about 4% of the current global liquefied natural gas (LNG) market. Japan, South Korea and China are the main customers for oil and LNG exports.
In May, the Japanese government announced that it was not currently planning to withdraw from major oil and gas extraction projects with Moscow in the Russian Far East.
While Japanese Prime Minister Fumio Kishida pledged to phase out dependence on Russian energy, the policy of maintaining interests on Sakhalin 1 and 2 remained unchanged.
Russia is also the biggest investment destination for Indian oil and gas companies and New Delhi continues to focus on developing the Far East region, the Sakhalin oilfields being a classic example.
As IndiaNarrative.com reports, a long-awaited trilateral cooperation initiative between long-standing and time-tested partners India, Russia and Japan was taking shape in the Russian Far East before the conflict began. in Ukraine.
India’s public sector companies have made investments worth $16 billion, including in the Far East and Eastern Siberia, in oil and gas assets such as Sakhalin-1, Vankor and Taas-Yuryakh.
Russia is also the biggest investor in India’s oil and gas sector, with India encouraging new investment by Russian energy majors like Rosneft, GazpromNeft and Sibur.
Also read: Japan ‘will take time’ to ban Russian oil and retain stake in Sakhalin project