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GLNG: Mitsui writes down value of Russian LNG investments

Mitsui has signalled that it could reconsider its investment in Arctic LNG 2.
Mitsui has signalled that it could reconsider its investment in Arctic LNG 2.

Japan’s Mitsui & Co. said that it had written down the value of its investments in two Russian LNG projects by a combined JPY80.6bn ($617mn). The company reduced the value of its 12.5% stake in the Sakhalin-2 oil and LNG project by JPY44.1bn ($338mn) and cut the value of its investments in the under-construction Arctic LNG 2 project by JPY36.4bn ($279mn).
Mitsui also reported a JPY20.9bn ($160mn) loss in its LNG business in connection with its investments in Russia. The figure includes provisions against potential losses on loan guarantees the company has made.
The war in Ukraine and the exit of various international oil companies (IOCs) from their investments in Russia have brought the participation of other companies, including Japanese ones, into sharp focus. The Japanese government has insisted that Japanese companies will continue to participate in Russian projects – notably Sakhalin-1 and Sakhalin-2 – as they seek to retain access to energy imports. But they are increasingly coming under pressure, including financial pressure.
Indeed, Mitsui said that while it wants to remain involved in Sakhalin-2, the company’s position on Arctic LNG 2 could yet change.
“There is a good chance that the situation in Arctic 2 will change, but that is not the case at this stage,” said Mitsui’s CEO, Kenichi Hori. “If that occurs, we’ll make an announcement after evaluating the situation and confirming what needs to be confirmed among the partners.”