Osaka Gas Signs LNG Contract with New Operator of Russia's Sakhalin 2

(Reuters) — Japanese natural gas distributor Osaka Gas Co. said on Tuesday it had signed a contract to continue purchasing 200,000 tonnes of LNG from a new operating company running Russia's Sakhalin 2 project.

Details of the contract are not public, an Osaka Gas spokesperson said.

Last year, in retaliation for Western sanctions imposed on Russia after it sent troops to Ukraine, President Vladimir Putin signed a decree to establish a new legal entity to oversee the Sakhalin 2 project, one of the biggest LNG facilities globally.

Shell SHEL.L has decided to exit the project, but the Kremlin approved applications from two Japanese trading houses, Mitsui & Co. and Mitsubishi Corp., to keep their stakes within the new Russian operator, Sakhalin Energy.

Osaka Gas had been buying 200,000 tonnes of LNG per year from the Sakhalin 2 project since 2008 — or about 2% of the Japanese company's supply — under a contract that had been set to expire in 2031.

Last year, Japan's biggest city gas supplier Tokyo Gas Co. Ltd. and JERA, the country's biggest power generator, also signed long-term contracts with the new Sakhalin 2 operator to continue buying LNG.

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