The Japanese government supports the participation of commercial companies in Sakhalin-2-sources

By Yoshifumi Takemoto, Ritsuko Shimizu and Miho Uranaka

TOKYO, July 16 (Reuters) – The Japanese government plans to back Mitsui & Co and Mitsubishi Corp in their bid to stay in the Sakhalin-2 oil and gas project, three sources said, after Russia took control of the key to Japanese energy development. supply.

There has been speculation that Japanese companies will remain in the consortium, as tensions between Tokyo and Moscow rise following Russia’s invasion of Ukraine. Japan has joined Western sanctions against Russia.

Japan’s Ministry of Commerce and Industry will communicate the decision to companies soon, the three people with knowledge of the matter said. They asked not to be named as the information is not public.

Resource-poor Japan faces a historic risk to its energy security as tensions escalate with tight global supplies and sky-high prices. Japan imports 10% of its liquefied natural gas from Russia, mainly under a long-term contract with Sakhalin-2.

Japan’s effort is likely intended to send a clear signal of government support for the project and the movement of money from Western countries that have banned private companies from making new investments in Russia.

People declined to give details on what the Japanese government will do to help trading houses maintain their stakes.

Prime Minister Fumio Kishida said on Thursday the government would work with the private sector on the issue, as Japan aims to secure its straight and stable supply of liquefied natural gas.

Representatives from Mitsui and Mitsubishi said on Saturday that the companies will discuss the issue together with the government as well as with their partners. Officials from the Ministry of Economy, Trade and Industry could not be reached for comment outside office hours.

Shell, one of the consortium’s largest stakeholders, has announced its exit from the project and is in talks to sell its stake to a consortium of Indian energy companies, Reuters reported in May.

Russian state-owned Gazprom has a 50% plus one share stake in the project, while Mitsui has 12.5% ​​and Mitsubishi 10%.

Last month, Russia decided to set up a company that will take over all rights and obligations of Sakhalin Energy Investment Co in the Russian Far East, amid Western sanctions imposed on Moscow.

It was up to the government of sanctioned Russia to decide whether foreign shareholders should remain in the consortium. (Reporting by Yoshifumi Takemoto, Ritsuko Shimizu, Miho Uranaka; Writing by Junko Fujita; Editing by William Mallard)

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