Russia’s state-owned gas company Gazprom secured more than 50% of the new entity, and is holding the remaining share until existing shareholders take up their stake within a deadline of one month

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The new entity that took over the Sakhalin-2 LNG project. (Credit: Rudy and Peter Skitterians from Pixabay)

Japan-based general trading companies Mitsui & Co., and Mitsubishi Corp., are reportedly planning to buy stake in the new entity that took over the Sakhalin-2 LNG project.

In June, the Russian President Vladimir Putin has signed a decree to take charge of the Sakhalin-2 project, as part of an economic war with the West and its allies.

The five-page decree, which seizes full control of the Sakhalin-2, follows Western sanctions imposed on Russia, over its invasion of Ukraine.

A new Russian entity, dubbed Sakhalinskaya Energiya, has been created to take over the LNG project from the previous operator Sakhalin Energy Investment.

Mitsui and Mitsubishi jointly held 22.5% in the project, and their decision is driven by the Japanese government considering Sakhalin-2 is an important source of energy.

A Mitsubishi spokesperson told Reuters: “A resolution was passed this morning regarding the submission of a consent to take a stake. The consent will be filed by the deadline.

A Mitsui spokesperson said: “We have decided to retain our stake in the Sakhalin-2 project.”

Russia’s state-owned gas company Gazprom secured more than 50% of the new entity, and is holding the remaining share until existing shareholders take-up their stake.

Shell and the two Japanese companies hold less than 50% stake in the previous operator Sakhalin Energy Investment.

British multinational oil and gas company has already written off the value of its Russian assets, and made clear that it will quit from the project, few months ago.

According to a decree issued by the Russian government earlier this month, the foreign investors are given one month deadline to claim their stakes, said Reuters’ report.

If the existing stakeholders fail to apply for the stake, the government would evaluate, and sell the ownership to a local company, said the report.

In a separate development, Japan’s JERA, a 50-50 joint venture between TEPCO Fuel & Power and Chubu Electric Power, has signed an agreement with the new operator of the Sakhalin-2 energy project.