Russia’s Gazprom buys former Shell stake in Sakhalin for $1bn
The Russian government says its 27.5% stake in Sakhalin Energy is due to be sold to a company called Sakhalin Project
26 March 2024 - 10:24
by Vladimir Soldatkin
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Moscow, Russia — Kremlin-controlled energy giant Gazprom has acquired a 27.5% stake, formerly owned by Shell, in Russian liquefied natural gas (LNG) producer Sakhalin Energy for about $1bn, according to a government order.
The government also officially nullified its order a year ago on selling the stake to Gazprom’s rival, Novatek, without explanation.
The Russian government said late on Monday that the 27.5% stake in Sakhalin Energy was due to be sold to a company called Sakhalin Project for 94.8-billion roubles ($1.02bn).
Sakhalin Project is fully owned by Gazprom, company filings showed. Gazprom would not comment further, while Novatek did not immediately respond to a request for comment.
Gazprom owns 50% in Sakhalin Energy located on the southern tip of Russia’s Pacific island of Sakhalin. Other shareholders are Japanese companies Mitsui (12.5%) and Mitsubishi (10%).
After Moscow’s decision to send troops into Ukraine in February 2022, Shell said it would quit the project, in which it held a stake worth 27.5% minus one share.
The company booked a $1.6bn impairment related to the Russian LNG project in the first quarter of 2022. Shell was not immediately available for comment.
Sources have said Shell believed there was a risk Russia would nationalise foreign-held assets, while Russian President Vladimir Putin has repeatedly said Moscow would retaliate against the US and its allies for freezing Russian assets and other sanctions.
In June 2022, the Sakhalin-2 operating company was transformed into a Russian entity via a presidential decree.
Shell as well as Mitsui and Mitsubishi were then asked to apply to keep their stakes if they wanted to.
Moscow invited firms interested in obtaining Shell’s stake — as well as Exxon Mobil’s abandoned share in the sister Sakahlin-1 project — to submit applications to the government.
In 2022, Sakhalin energy accounted for almost 3% of global LNG demand. Its cargoes mainly head to Japan, South Korea, China, India and other Asian countries.
In 2023, it produced more than 10-million tonnes of LNG, down from 11.5-million tonnes in 2022.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Russia’s Gazprom buys former Shell stake in Sakhalin for $1bn
The Russian government says its 27.5% stake in Sakhalin Energy is due to be sold to a company called Sakhalin Project
Moscow, Russia — Kremlin-controlled energy giant Gazprom has acquired a 27.5% stake, formerly owned by Shell, in Russian liquefied natural gas (LNG) producer Sakhalin Energy for about $1bn, according to a government order.
The government also officially nullified its order a year ago on selling the stake to Gazprom’s rival, Novatek, without explanation.
The Russian government said late on Monday that the 27.5% stake in Sakhalin Energy was due to be sold to a company called Sakhalin Project for 94.8-billion roubles ($1.02bn).
Sakhalin Project is fully owned by Gazprom, company filings showed. Gazprom would not comment further, while Novatek did not immediately respond to a request for comment.
Gazprom owns 50% in Sakhalin Energy located on the southern tip of Russia’s Pacific island of Sakhalin. Other shareholders are Japanese companies Mitsui (12.5%) and Mitsubishi (10%).
After Moscow’s decision to send troops into Ukraine in February 2022, Shell said it would quit the project, in which it held a stake worth 27.5% minus one share.
The company booked a $1.6bn impairment related to the Russian LNG project in the first quarter of 2022. Shell was not immediately available for comment.
Sources have said Shell believed there was a risk Russia would nationalise foreign-held assets, while Russian President Vladimir Putin has repeatedly said Moscow would retaliate against the US and its allies for freezing Russian assets and other sanctions.
In June 2022, the Sakhalin-2 operating company was transformed into a Russian entity via a presidential decree.
Shell as well as Mitsui and Mitsubishi were then asked to apply to keep their stakes if they wanted to.
Moscow invited firms interested in obtaining Shell’s stake — as well as Exxon Mobil’s abandoned share in the sister Sakahlin-1 project — to submit applications to the government.
In 2022, Sakhalin energy accounted for almost 3% of global LNG demand. Its cargoes mainly head to Japan, South Korea, China, India and other Asian countries.
In 2023, it produced more than 10-million tonnes of LNG, down from 11.5-million tonnes in 2022.
Reuters
Gazprom investment in PetroSA subject to studies
Russia orders six-month ban on gasoline exports
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.