(Bloomberg) -- Russia’s government ordered the establishment of a new operator for the Sakhalin-2 gas project in the Far East region, according to a document published in the nation’s legal database.
The entity, called Sakhalinskaya Energija, is to be based in Yuzhno-Sakhalinsk, the main city of the Sakhalin island, where the project is located, according to the order. Russia’s gas giant Gazprom PJSC will hold just over 50% in the company, in line with its ownership in the former operator Sakhalin Energy.
The order follows an earlier decree by President Vladimir Putin, which required transfer of the project operator from Bermuda to a new Russian entity amid risks to the country’s interests and economic security. Foreign shareholders in Sakhalin-2, which in addition to offshore gas fields includes Russia’s first liquefied-gas plant, have one month from the entity’s establishment to decide whether they want to take a holding in the new company.
So far, Russia’s commercial register has no information on Sakhalinskaya Energija.
Shell Plc, with a 27.5% stake in the facility, announced it would exit the project after Russia invaded Ukraine. Its chief executive officer, Ben van Beurden, said the energy major is “entirely unlikely” to take a stake in the new Sakhalin entity.
Japanese trading houses Mitsubishi Corp. and Mitsui & Co own a combined 22.5% in Sakhalin-2. Japan, the biggest buyer of LNG from the plant that’s been operating since 2009, said it needs to study what contracts under the decree would look like, and discuss its response with Japanese stakeholders, Prime Minister Fumio Kishida said on July 1 after the project’s reshuffle was first announced.
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