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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