Mitsubishi, the Japanese company, retains its stake in the Sakhalin II project. Russia has approved the application for transfer of shares in the new operator of the Sakhalin II project.
Initially, the LNG project consortium included Gazprom (50% plus one share), Shell (27.5%), Mitsui & Co (12.5%) and Mitsubishi (10%). However, Shell decided to withdraw following the Russian invasion of Ukraine.
Mitsubishi remains in the Sakhalin II project
An order, signed by the Russian Prime Minister Mikhail Mishustin, approved the transfer of 10% of Mitsubishi’s stake. The company had shares in a former operator, Sakhalin Energy, now transferred to the new operator. The new consortium was created on the orders of Vladimir Putin to take over ownership of the LNG project.
This decision follows the Western sanctions resulting from the Russian invasion of Ukraine. Originally, before being transferred to a national company, Sakhalin II was operated by a Bermuda-based operator.
In fact, the companies, including Mitsubishi, present in the former operator had to submit a new application to keep their share. The latter had one month to make their transfer claim.
In case these companies did not apply, the Russian government reserved the right to evaluate and resell the shares in the new operator. Some critics accuse Russia of raising the stakes through this operation.
Sakhalin II, essential to global and Japanese supply
Sakhalin II is a project of great importance for LNG production and export. Indeed, the project supplies 4% of the world market.
In addition, the project also contributes to Japan’s energy supply. The country imports 10% of its LNG from Russia, much of which comes from Sakhalin II. Therefore, despite the Japanese sanctions against Russia, Japan continues to support the participation of Mitsui & Co and Mitsubishi in the project.
Koichi Hagiuda, the Minister of Industry, said:
“The Sakhalin-2 project is extremely important to the stability of Japan’s energy supply, and we will essentially continue to maintain the holdings.”
However, Japan has expressed a desire to reduce its dependence on Russian LNG.
However, Shell, which held 27.5% of the project, has decided to withdraw from the consortium. The company said at the time during the summer:
“We continue to work to find an acceptable arrangement that allows us to exit our interest in Sakhalin Energy in accordance with applicable legal requirements and the project agreements.”
Like Mitsubishi, Mitsui & Co. has also expressed a desire to transfer its 12.5% stake, which has been approved by Moscow.
