Japanese trading houses Mitsui & Co. (8031.TO) and Mitsubishi Corp. (8058.TO) are looking to take stakes in what would be Russia's largest natural gas project, planned for Siberia's remote Yamal Peninsula, a report said Thursday.
Japanese trading houses Mitsui & Co. (8031.TO) and Mitsubishi Corp.
(8058.TO) are looking to take stakes in what would be
Russia
's
largest natural gas project, planned for
Siberia
's
remote
Yamal
Peninsula
, a
report said Thursday.
The liquefied natural gas or LNG project, to be led by Russian energy giant
Gazprom OAO (GAZP.RS), would reach costs in an estimated range of Y10 trillion
to Y20 trillion ($120 billion to $240 billion), the Yomiuri Shimbun newspaper
reported.
A Mitsui spokesperson said the trading company is indeed "positively
considering" participation in the project. Mitsubishi officials couldn't
immediately be reached for comment.
The gas would be exported from the northwestern Siberian area, north of the
Arctic
Circle
on the
Kara
Sea
, to
Europe
and
Asia
by
LNG carrier ships in the summer months, starting as early as 2020, the
newspaper said.
The Arctic sea route can't be used in winter, but the shipping season is
expected to gradually lengthen as global warming reduces ice cover and the
technology for ice-breaking ships improves, the report said.
Russia
expects to complete a feasibility study around the middle of this year and to
start production as early as 2020, the daily said.
The Japanese firms are expected to take a combined stake of up to about 10% in
the project, the report said.
Mitsui and Mitsubishi already participate in the Sakhalin-2 natural gas
development project on
Russia
's
Sakhalin
Island
.
They initially owned a total 45% stake in Sakhalin-2 but were forced to sell
about half of it to Gazprom under Russian state pressure.
Natural gas reserves in the
Yamal
Peninsula
are
believed to exceed 38 trillion cubic meters--far above estimates for the
Sakhalin-2 project, the report said.
Russia
is
seeking participation by Mitsui and Mitsubishi because they have already
marketed Sakhalin-2 gas to
Japan
and
other Asian countries and because of their funding ability, the report said.
The two Japanese trading companies will make a final decision after
Russia
releases the feasibility study--taking into consideration the potential
profitability of the project and possible political risk, including territorial
rows over islands disputed by
Moscow
and
Tokyo
, the
report said.
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