Japan’s Mitsui says no plans to exit Russia’s Sakhalin-2 LNG project

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Japanese trading house Mitsui & Co has no plans to withdraw from the Sakhalin-2 liquefied natural gas (LNG) project in Russia, a senior executive said on June 21, adding the operation was continuing super-chilled fuel exports to Japan.

The logo of Japanese trading company Mitsui & Co. is seen in Tokyo, Japan, January 10, 2018. REUTERS/Toru Hanai/FILE PHOTO

“We have decided last year to keep our stake in the Sakhalin-2 after consulting with the Japanese government as the project supplies about 9% of Japan’s LNG imports,” Toru Matsui, Mitsui’s senior executive managing officer, told an annual general meeting.

“We have no plan to exit the project at the moment,” he said, while adding that Mitsui would make an appropriate change if and when the situation changed because of the Japanese company’s policy of complying with any government sanctions.

Asked by a shareholder whether Mitsui was under pressure or had received unreasonable requests from the Russian government, Matsui said the project was experiencing no issues with operations and was continuing to export LNG to Japan.

Mitsui and its peer Mitsubishi Corp retained their 22.5% combined stakes in Sakhalin-2 after the Kremlin ordered the establishment of a new locally based operating company in retaliation for Western sanctions imposed on Moscow after it sent troops to Ukraine last year.

Their former partner Shell quit Sakhalin-2 as one of the many Western firms that pulled out of Russia after Moscow’s invasion of Ukraine. In April, the Russian government approved the sale of Shell’s 27.5% stake to local natural gas producer Novatek.

Sakhalin-2 is one of the world’s largest LNG projects, supplying about 4% of the global market. Russia’s Gazprom holds a 50%-plus-one-share stake in the operation.