Shell says assessing implications of Russia’s Sakhalin LNG move

LNG giant Shell said it was looking into the implications of a decree that would allow Russia to take over control of the Sakhalin-2 LNG export terminal.

“As a shareholder, Shell has always acted in the best interests of Sakhalin-2 and in accordance with all applicable legal requirements,” a Shell spokesperson told LNG Prime in emailed comments on Friday.

“We are aware of the decree and are assessing its implications,” the spokesperson said.

The five-page decree signed by President Vladimir Putin says that Russia would create a new company which would take over all rights and obligations of the Sakhalin Energy Investment Company due to Western sanctions imposed on Russia.

According to the document, Russian government would decide whether foreign shareholders are to remain in the Sakhalin Energy Investment Company.

Shell has a 27.5 percent interest in in the Sakhalin-2 LNG export terminal, while Russia’s Gazprom has a 50 percent operating stake. Japan’s Mitsui owns 12.5 percent stake and compatriot Mitsubishi holds 10 percent in the plant.

Most of Sakhalin LNG volumes go to Japan

The Sakhalin-2 LNG facility, operated by Sakhalin Energy, started producing LNG back in 2009 with a design capacity of 9.6 mtpa, but due to technical improvements and upgrades, together with weather and temperature conditions, production rose by 20 percent.

Most of these volumes land in Japan, followed by South Korea, Taiwan, and China.

Shell said earlier this year it would exit its joint ventures with Russia’s Gazprom and related entities, including its stake in the Sakhalin-2 LNG export terminal. The firm has been in talks since to sell the stake.

On the other side, both Mitsubishi and Mitsui previously said they would retain their stakes in the LNG plant as Japan imports most of Sakhalin LNG cargoes.

Japanese companies Hiroshima Gas, Jera, Kyushu Electric, Osaka Gas, Saibu Gas, Toho Gas, and Tohoku Electric receive LNG supplies from the Sakhalin plant, according to GIIGNL.

Other buyers include South Korea’s Kogas and Taiwan’s CPC.

- Advertisements -

Most Popular

QatarEnergy to further boost LNG output

State-owned LNG giant QatarEnergy said on Sunday it will further boost its liquefied natural gas production from the North...

Deutsche ReGas starts commissioning Mukran FSRU terminal

LNG terminal operator Deutsche ReGas has kicked off commissioning activities at its FSRU-based LNG import facility in Germany’s port...

CEO: DOE’s permit pause will not slow down Cheniere’s LNG expansion plans

US LNG exporting giant Cheniere is going "full steam ahead" with plans to expand its Sabine Pass and Corpus...

More News Like This

Venture Global seeks more time to complete Calcasieu Pass LNG terminal

US LNG exporter Venture Global LNG has requested more time from the US FERC to complete the commissioning of...

Shell: global LNG demand to rise more than 50 percent by 2040

Global demand for liquefied natural gas (LNG) is estimated to rise by more than 50 percent by 2040, as...

Seatrium renews LNG carrier repair deal with GasLog and Shell

Singapore's Seatrium has renewed its long-term favored customer contract with units of Greece's LNG shipping firm GasLog and UK-based...

EIG’s MidOcean buys Peru LNG stake from SK

MidOcean Energy, the LNG unit of US-based energy investor EIG, has purchased a stake in LNG terminal operator Peru...