TOKYO: The Russian side has informed electric power companies and other firms in Japan that prices, amounts and other conditions on liquefied natural gas procurement from the Sakhalin-2 oil and gas development project will not be changed, it has been learned.
In the notice, the Russian side also urged the Japanese firms to sign a contract with a new company that will take control of the project in the Russian Far East.
The Sakhalin-2 project supplies Japan with 6 million tons of LNG every year, which is around 8 pct of the country’s yearly LNG imports.
As Tokyo Gas Co., Tohoku Electric Power Co. and others have been purchasing Sakhalin-2 LNG at prices cheaper than market prices, there is concern that electricity and gas bills in Japan may rise further if LNG supplies from the project are disrupted.
The Japanese companies will carefully examine the content of the notice and reach a decision on whether to sign a contract with the project’s new operating company.
On Aug. 5, the Russian government established the new company to take over the project.
Japanese trading houses Mitsui & Co. and Mitsubishi Corp. have stakes in the project. They have to acquire shares in the new operator in order to retain their interests.
The Japanese government is currently in talks with the two firms in hopes to maintain their stakes in the project.