Japan Plans to Protect Companies Involved in Sakhalin-2 Project

After Putin signed a decree to allow the government to take over the Sakhalin-2 oil and gas project, the Japanese government  plans to support its two companies, Mitsui and Mitsubishi, in their attempts to stay in the project. There has been uncertainty whether the two companies would stay in the consortium after the Kremlin’s move, as tensions between the two countries rise over Russia’s invasion of Ukraine, and Japan joining the Western sanctions on Moscow.

Japan’s trade and industry ministry is expected to relay its decision to the companies shortly.

As tensions intensify in terms of tight global energy supplies and skyrocketing prices, Japan faces a historic energy security. Japan imports 10% of its LNG from Russia, most of which are under long term contracts from Sakhalin-2.

Japan’s effort is likely aimed at sending a clear signal of government backing for the project and bucks moves by Western nations that have prohibited private companies from making new investments in Russia.

Last week, Prime Minister Kishida said the government would work with companies about possible solutions, as Japan tries to secure its stable supply of LNG.

Mitsui and Mitsubishi also said they will discuss the matter with the government as well their partners.

Shell , one of the largest stakeholders in the consortium, has already announced its withdrawal from the project and is in talks to sell its stake to a consortium of Indian energy companies.

Russia’s state-run Gazprom has a 50% plus one stake in the project, while Mitsui holds 12.5% and Mitsubishi 10%.

Last month, the Kremlin said a new firm would be created to take over all rights and obligations of the Sakhalin Energy Investment Co, amid Western sanctions imposed on Moscow.

It was up to up to the government of sanctions-hit Russia to decide whether foreign shareholders were to remain in the consortium.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now


Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today


Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Rotterdam Port Triples Hydrogen Delivery Forecast

Rotterdam, Europe’s biggest port, has tripled its estimate for the amount of green hydrogen it expects  to deliver to northwest Europe each year by 2030. Green hydrogen produced from renewable sources is expected to play a major part in Europe’s attempts to cut greenhouse gas emissions.

Germany to Send Heavy Weapons to Ukraine for the First Time

Germany announced on Tuesday that it will send heavy weapons to Ukraine for the first time to help its effort to fend off Russian invasion. The German government has been under pressure from Ukraine and Western allies to toughen its stance against Russia.  

Germany Takes Control of Russian Owned Schwedt Refinery

German government decided to take control of Russian owned Schwedt oil refinery on Friday, as Berlin scrambles to shore up energy supplies and meet commitment to the European Union to eliminate Russian oil imports by the end of the year. The move could meet a retaliatory response from Moscow. Germany’s economy ministry announced it was putting Schwedt refinery, owned by a unit of Russian oil company Rosneft, under trusteeship of the industry regulator. The refinery supplies 90% of Berlin’s fuel. 

Stay informed

error: This content is protected !!