Sakhalin-2 will undergo maintenance for the first time without the participation of foreign contractors – Kommersant
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The Sakhalin II LNG project will undergo annual maintenance for the first time without foreign contractors. Work will begin in July and will last 40 days. As noted Bloombergtraders fear supply cuts if maintenance is delayed.
According to the agency, LNG traders are concerned that without the help of foreign contractors, Russia may not be able to complete the work on time. An extended shutdown will reduce key gas supplies during the winter resupply period, resulting in higher prices.
The British company Shell Plc, a former partner of the Sakhalin-2 project (27.5% minus 1 share), previously provided its technical capabilities for servicing, but in 2022 refused to participate in it due to the start of a military operation in Ukraine. Japanese group companies Mitsui & Co. (12.5% of shares) and Mitsubishi (10% of shares) retained their participation in the new Russian operator of the project.
According to Bloomberg, LNG exports from this project jumped almost 10% in 2022. Although Japan is still the largest buyer of the project’s feedstock (in the past quarter, supplies from the project accounted for about 8% of the country’s LNG demand), most of the supplies come from China.
Extended project maintenance could threaten to intensify global competition for LNG between Asia and Europe, which has become much more dependent on LNG as pipeline gas supplies from Russia all but ceased.
In mid-April, the Russian government allowed NOVATEK to buy 27.5% of Sakhalin Energy for 94.8 billion rubles. Previously, the share in the operator of the Sakhalin-2 project belonged to Shell, which left Russia.
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