Russian operator takes over Sakhalin-2 LNG project

Aug 19, 2022 | BUSINESS

The state acquisition is aimed at consolidating control of Russian energy assets and comes in response to Western sanctions

Russian company Sakhalin Energy LLC stated on Friday that it has officially started operating Sakhalin-2, a major Russian oil and liquefied natural gas (LNG) project that was transferred to domestic management two months ago. 

“Sakhalin Energy is carrying out production and commercial operations. Our absolute priority is still given to the key principles – staff safety, health and care, maintenance of uninterrupted and reliable production while fulfilling all the current obligations,” Andrey Oleinikov, the head of the company, said in a statement.

Sakhalin-2, one of the world’s largest LNG projects with an annual output of 12 million tons, was launched back in 2009 as a joint venture between Russia’s Gazprom, Japan’s Mitsui and Mitsubishi, and UK-based Shell. The enterprise, located on the Russian island of Sakhalin in the Pacific Ocean, north of Japan, supplies LNG mainly to Asian markets.

In June, Russian President Vladimir Putin ordered the reorganization of the Sakhalin-2 LNG enterprise, transferring ownership to a new domestic company. The move came in response to sanctions from ‘unfriendly states’.


READ MORE: Putin orders a huge Far Eastern oil and gas project be re-organised: Is Russia kicking the West out of key energy deals?

Separately, Asahi, one of Japan’s biggest media outlets, reported on Friday that several Japanese utilities were ready to sign contracts with the new Russian operator. The new agreements reportedly offer electricity and gas companies the same terms that were offered under the previous ownership.

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