Russia Says Conditions Intact on Sakhalin-2 LNG Procurement

Economy

Tokyo, Aug. 18 (Jiji Press)--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. <9531>, Tohoku Electric Power Co. <9506> 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.

[Copyright The Jiji Press, Ltd.]

Jiji Press