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International Herald Tribune: Japanese companies deny report selling gas project stakes to Russia’s Gazprom

The Associated Press
Published: September 20, 2006
 
TOKYO Two Japanese trading companies on Thursday denied a report that they plan to sell some of their shares in a multibillion-dollar petroleum drilling project in Russia’s Far East that was halted by Moscow earlier this week.

 
Russia’s withdrawal on Monday of an environmental permit for the Sakhalin-2 project, led by Royal Dutch Shell PLC, could effectively halt work on the project and put at risk multibillion-dollar energy investments by a multinational consortium.
 
Japan’s Yomiuri newspaper reported Thursday that Tokyo-based trader Mitsui & Co. has begun negotiations to sell a 3 percent stake out of its 25 percent holding in Sakhalin Energy Ltd., the international energy consortium operating the project, to Russian government-affiliated gas firm OAO Gazprom.

 
The report also said that trader Mitsubishi Corp., also based in Tokyo, was negotiating the sale of a 2 percent stake out of its 20 percent holding in the project to Gazprom.
 
Spokesmen for the two Japanese companies, however, denied the Yomiuri report as without factual basis. Both spoke on condition of anonymity, citing company policy.
 
The US$20 billion (€15.78 billion) Sakhalin-2 is one of two offshore projects in Russia’s Pacific being developed by overseas companies under production-sharing agreements signed in the 1990s, and was due to come online in 2008.
 
Russia’s Natural Resources Ministry said it decided to revoke the Sakhalin-2’s permit to satisfy arguments made by Russian prosecutors, which allege permission to develop the second phase of the project had been granted illegally.
 
Much of the liquefied gas from Sakhalin-2 is destined for Japan, which is seeking to reduce its dependence on the Middle East for energy.
 
TOKYO Two Japanese trading companies on Thursday denied a report that they plan to sell some of their shares in a multibillion-dollar petroleum drilling project in Russia’s Far East that was halted by Moscow earlier this week.
 
Russia’s withdrawal on Monday of an environmental permit for the Sakhalin-2 project, led by Royal Dutch Shell PLC, could effectively halt work on the project and put at risk multibillion-dollar energy investments by a multinational consortium.
 
Japan’s Yomiuri newspaper reported Thursday that Tokyo-based trader Mitsui & Co. has begun negotiations to sell a 3 percent stake out of its 25 percent holding in Sakhalin Energy Ltd., the international energy consortium operating the project, to Russian government-affiliated gas firm OAO Gazprom.
 
The report also said that trader Mitsubishi Corp., also based in Tokyo, was negotiating the sale of a 2 percent stake out of its 20 percent holding in the project to Gazprom.
 
Spokesmen for the two Japanese companies, however, denied the Yomiuri report as without factual basis. Both spoke on condition of anonymity, citing company policy.
 
The US$20 billion (€15.78 billion) Sakhalin-2 is one of two offshore projects in Russia’s Pacific being developed by overseas companies under production-sharing agreements signed in the 1990s, and was due to come online in 2008.
 
Russia’s Natural Resources Ministry said it decided to revoke the Sakhalin-2’s permit to satisfy arguments made by Russian prosecutors, which allege permission to develop the second phase of the project had been granted illegally.
 
Much of the liquefied gas from Sakhalin-2 is destined for Japan, which is seeking to reduce its dependence on the Middle East for energy.

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