July 01, 2022 07:52 GMT
Putin has signed a decree to transfer the rights of the Sakhalin 2 gas and oil project to a new Russian company.
- The decree indicates it is up to the Kremlin to decide whether foreign stakeholders are to remain in the consortium. It means stakes worth just under 50%, held by Shell, Mitsui and Mitsubishi may have to be abandoned.
- Shell has been in talks to sell its stake in the project while the Japanese entities had previously said they would not give up their stakes, citing Japanese energy security concerns.
- According to the decree, Gazprom will keep its stake, but other shareholders are required to ask the Russian government for a stake in the new firm within one month.
- Sakhalin-2 supplies about 4% of the world's current LNG market. It throws further uncertainty to the global gas market which has been hit by a Freeport LNG resumption delay, strikes at Australia’s Prelude and reduced supplies to Europe on Nord Stream 1.