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Shell Expects New Sakhalin LNG Sales To Japan By Year End

The Wall Street Journal: Shell Expects New Sakhalin LNG Sales To Japan By Year End

 

DOW JONES NEWSWIRES

June 2, 2004 2:43 a.m.

 

SINGAPORE — The Royal Dutch/Shell Group (RD) expects to finalize new long-term deals for liquefied natural gas sales to Japan from the Sakhalin II project in Russia this year, a company official said Wednesday.

 

Andrew Faulkner, vice president, North Asia, for Shell Gas & Power, said talks underway with four to five Japanese utility companies he didn’t wish to identify are expected to be finalized before the year ends.

 

Osaka Gas Co. (9532.TO), Japan’s second largest city-gas supplier, last year said it was interested in buying LNG from Sakhalin.

 

Japan is a key focus for LNG exports from the Shell-led Sakhalin Energy consortium, which comprises Japanese investors Mitsui & Co (8031.TO) and Mitsubishi Corp. (8058.TO).

 

Already, four Japanese customers have committed to buy a combined 3.4 million metric tons a year of LNG from Sakhalin Energy starting in 2007. They are Tokyo Gas Co. (9531.TO), Tokyo Electric Power Co. (9501.TO), Kyushu Electric Power Co. (9508.TO) and Toho Gas Co. (9533.TO).

 

Besides Japan, Shell is also targeting South Korea, China, the U.S. West Coast and Mexico as potential offtakers of Sakhalin LNG.

 

Sakhalin is “located right at the doorstep of the Asia Pacific,” Faulkner said, adding that Sakhalin is seven times closer to Japan and South Korea compared with the Middle East.

 

-By Sharon Lim, Dow Jones Newswires; 65-6415-4067; [email protected]

 

-Edited by George Bernard

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