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Today's paper. Last Updated: 02/10/2012

Sakhalin Sends First LNG Shipment to Japan

Reuters
Sakhalin Energy sent Russia's first cargo of liquefied natural gas to Japan on Sunday from the Sakhalin-2 project that will allow the Kremlin to extend its reach in world energy markets from Europe into Asia and North America.

Sakhalin Energy, which is controlled by Gazprom, loaded the 145,000 cubic meter cargo for the two-day voyage to Tokyo Bay and the first Japanese buyers of Russian gas: Tokyo Gas and Tokyo Electric Power.

"Russia has marked its entry into the Asia-Pacific LNG market, and Japan and Korea have a new long-term energy partner," Sakhalin Energy chief Ian Craig said in a statement.

The Sakhalin-2 project aims to supply 5 percent of world demand for LNG when it reaches full capacity next year, President Dmitry Medvedev said last month when he launched the plant on the southern tip of Sakhalin.

The project, in which Royal Dutch Shell owns a minority stake after ceding control to Gazprom, is the first LNG plant in Russia. Japan's Mitsubishi and Mitsui also own stakes. Sakhalin-2 became symbolic of resource nationalism in Russia and the state's ability to overturn previous deals.

Sakhalin Energy said Sunday that "practically all" of the 9.6 million tons of annual production capacity had already been committed in long-term sales contracts to buyers in Japan, South Korea and other markets.


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