Nikkei learned about the contracts of Japanese companies with the new Sakhalin-2 operator

Japanese companies JERA (owned by Tokyo Electric Power and Chubu Electric Power) and Tokyo Gas have extended contracts for the purchase of liquefied natural gas (LNG) with a new project operator “Sakhalin-2“, informed quoting sources from the Nikkei newspaper.

According to the Ministry of Economy, Trade and Industry, so far none of the Japanese companies ordering the Sakhalin-2 project has refused to renew the gas supply contract with the new company. Eight companies receive LNG from Sakhalin-2. In particular, Hiroshima Gas buys about 50% of its gas from Sakhalin-2, 20% each from Kyushu Electric Power and Toho Gas, while Tohoku Electric Power and Saibu Gas each account for 10% in the purchase structure.

The new operator of the Sakhalin-2 liquefied natural gas project, LLC Sakhalin Energy, has started work, the company announced on August 19. The company was established after the signing of a decree by Russian President Vladimir Putin, according to which all rights and obligations of the operator of the Sakhalin-2 project, Sakhalin Energy, are transferred to a specially created LLC. Now Gazprom owns 50% plus 1 share in the PSA project, Shell – 27.5% minus 1 share, Japanese Mitsui and Mitsubishi – 12.5 and 10% respectively.

The decree states that “Gazprom» will retain its share in the operator, receiving the same share in the new LLC, and the shares of the remaining shareholders «Sakhalin Energywill become the property of the new company. Foreign investors must apply within a month to keep their existing stakes in the new company.

Hiroshima Gas said earlier that after the signing of the Russian decree, it is discussing possible measures, including increasing purchases from other contractors in the event of a reduction in supplies.

The Japanese authorities spoke about the need to maintain a stake in oil and gas projects on the Sakhalin shelf. Economy, Trade and Industry Minister Koichi Hagiuda said the country would secure the necessary energy supplies “by all means possible.” At the same time, writes Kyodo, the state will seek to reduce its dependence on Russian energy.

The Sakhalin-2 LNG project is being implemented on the shelf of the Sakhalin Peninsula under a Production Sharing Agreement (PSA). It provides for the development of two fields – Piltun-Astokhskoye (mainly oil) and Lunskoye (mainly gas). This is the oldest PSA in Russia (concluded in 1994) and the first LNG project in the country.