Russia’s move to reshuffle ownership of the Sakhalin-2 natural gas project may constrict global markets even more by pushing Japan to compete with Europe for alternative sources of supply.
President Vladimir Putin’s decree to transfer rights for the plant to a new Russian company has no immediate impact on the project’s biggest customer, Prime Minister Fumio Kishida said. A Kremlin spokesman, Dmitry Peskov, also said there is no threat to LNG supplies from the plant at the moment. Japanese trading houses Mitsubishi Corp. and Mitsui & Co. own a combined 22.5% of the project.
Even so, the world’s second-biggest LNG buyer is considering replacing Russian flows by buying more from the spot market or from other countries, trade minister Koichi Hagiuda said. Japan already asked government officials in the U.S. and Australia for more supply in order to reduce dependence on Russia, he said.