Asia Pulse: SAKHALIN 2 PROJECT TO SUPPLY LNG TO U.S., S.KOREA: “Royal Dutch/Shell Group, Mitsui & Co and Mitsubishi Corp. have secured long-term contracts to ship liquefied natural gas (LNG) from Sakhalin to the U.S. and South Korea” (ShellNews.net) 4 April 05
Apr 04, 2005
TOKYO, April 4 Asia Pulse - Royal Dutch/Shell Group, Mitsui & Co. (TSE:8031) and Mitsubishi Corp. (TSE:8058) have secured long-term contracts to ship liquefied natural gas (LNG) from Sakhalin to the U.S. and South Korea, The Nihon Keizai Shimbun learned Sunday.
The companies have been developing oil and gas fields off Sakhalin Island under the project name of Sakhalin 2.
Estimated to cost more than 1 trillion yen (US$9.3 billion), the firms needed to line up stable volume buyers before the project begins commercial production in 2007 to ensure they will recover this huge investment.
Under the long-term contracts, Royal Dutch/Shell will ship 1.6 million tons of LNG a year to an LNG plant on the U.S. West Coast. In addition, Korea Gas Corp. will buy up to 2 million tons of LNG a year.
Annual LNG output from the Sakhalin 2 project is estimated at 9.6 million tons. The project has already clinched deals to supply a total of 3.4 million tons of LNG a year to Tokyo Electric Power Co. (TSE:9501) and other Japanese electric companies as well as Japanese gas suppliers. With the latest contracts to ship LNG to the U.S. and South Korea, the project now has buyers for 70 per cent of its gas output.
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