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Reuters: Japan firms may sell Gazprom 5% of Sakhalin-2:paper

TOKYO, Sept 21 (Reuters) – Japanese trading houses Mitsui & Co Ltd. and Mitsubishi Corp. are in talks to sell a combined 5 percent stake in the Royal Dutch Shell-led Sakhalin-2 oil and gas project to Russia’s state-run Gazprom , Japan’s Yomiuri newspaper reported on Thursday.

The Shell-led project is due to begin shipping large volumes of natural gas to Japan in two years. But it faces uncertainty after Russia revoked environmental approvals on Monday in a move seen by many as the Kremlin’s latest effort to wrest more control over energy resources.

Russia’s ambassador to Japan, Alexander Lusyukov, told reporters on Wednesday that Sakhalin-2 might be able to operate sooner if a state-run company joined the project.

Mitsui, which has a 25 percent stake in project, may sell a 3 percent stake, the newspaper said. Mitsubishi, which owns 20 percent, may sell a 2 percent stake, the paper said.

Speculation has been high that the two trading firms would part with some of their holdings in the project, and analysts have said a share sale would be positive in that it would bolster political support for the project.

But they are worried that the two firms may be pressured to sell at a low price to Gazprom, which could hurt their stock prices. 
 
© Reuters 2006. All rights reserved.

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