Japan plans to throw its weight behind Mitsui & Co and Mitsubishi Corp as they push to stay in the Sakhalin-2 oil and gas project after Russia seized control of the plant key to the nation’s energy supply.
The trade and industry ministry will relay the decision to the firms shortly, said three people aware of the issue who asked not to be named as the information is not public.
There were speculations whether the firms would remain in the consortium amid Tokyo-Moscow tensions over Russia’s invasion of Ukraine. Japan has joined sanctions on Kremlin.
Resource-poor Japan faces a historic energy security risk as tensions intensify with global supply tight and prices sky-high.
Japan imports 10% of its liquefied natural gas from Russia, mainly under long-term contract from Sakhalin-2.
Clear Signal Of Government Backing
Japan’s effort is aimed at sending a clear signal of government backing for the project and bucks moves by the West that has prohibited firms from making new investments in Russia.
The people declined to give details on what Japan will do to help the trading houses maintain their stakes.
Prime Minister Fumio Kishida said on Thursday the government would work with the private sector on the matter, as Japan aims to secure its right and stable supply of liquefied natural gas.
Mitsui and Mitsubishi representatives said on Saturday the companies will discuss the matter in collaboration with the government as well as their partners.
Officials from the Ministry of Economy, Trade and Industry could not be reached for comment outside business hours.
Shell, one of the largest stakeholders in the consortium, 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.
Russia’s state-run Gazprom has a 50% plus one share stake in the project, while Mitsui holds 12.5% and Mitsubishi 10%.
Russia last month decided to create a firm that will take over all rights and obligations of the Sakhalin Energy Investment Co in Russia’s Far East, 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 inthe consortium.
- Reuters with additional editing by Sean O’Meara