Japan plans to retain its interest in the Sakhalin 2 oil and gas project and will notify Russia of its intention by the early September deadline, with two major Japanese energy companies set to sign on, sources familiar with the matter said Friday.
The likely participation of Jera Co., a Tokyo-based power generator, and Tokyo Gas Co. would help Japan procure liquefied natural gas from Russia, the sources said.
Tokyo Gas said it is already in talks with the new company overseeing the project, while Jera declined to comment officially. Jera is a thermal power generator jointly set up by Tokyo Electric Power Company Holdings Inc. and Chubu Electric Power Co.
Among other Japanese utilities procuring LNG from Sakhalin 2, Saibu Gas Holdings Co. in Fukuoka, southwestern Japan, said it has received contract terms from the operator and is reviewing the details with an intent to renew. Hiroshima Gas Co. declined to comment.
For the project, Moscow set up a new company earlier this month to take control of the natural resources operation in the country's Far East region following the exit of British oil major Shell PLC from the predecessor over Russia's invasion of Ukraine.
The new operator, established on Aug. 5 under a decree by Russian President Vladimir Putin, has offered the same contract terms as those of the previous entity.
To maintain Japan's interest in the project, a key supply source for some Japanese energy firms, the Japanese government is in talks with trading houses Mitsui & Co. and Mitsubishi Corp., which hold 12.5 percent and 10 percent stakes in the project, respectively, the sources said.
Russian energy giant Gazprom has a stake of around 50 percent in the new operator.
Shareholders in the previous operator of the project need to apply for a stake in the new entity by Sept. 4, with applications to be reviewed within three days of receipt.
The Sakhalin 2 project accounts for around 9 percent of resource-poor Japan's LNG imports and Tokyo has said it considers it an important energy provider.
Economy, Trade and Industry Minister Yasutoshi Nishimura has asked Mitsubishi to consider investing in the new Sakhalin 2 operator while his predecessor Koichi Hagiuda had requested Mitsui to maintain its interest in the project.
The operator said Friday there will be no changes to the already set production and shipment plans for this year.