Shell Russian LNG project details!
Shell is still debating the fate of the contract for the purchase of liquefied natural gas from Sakhalin 2.
UK-based energy giant Shell Plc has announced it will not participate in Russia’s Sakhalin-2 liquefied natural gas (LNG) project after Moscow transferred the venture to a domestic operating company.
Shell Russian LNG project
According the company’s statement, Shell has notified Moscow that it will not take a stake in the new Sakhalin-2 operator in proportion to its stake in the old one.
The company, however, is still debating “options in line with applicable legal requirements and agreements” to keep a contract to receive LNG cargoes from the facility. In the statement, Shell assured customers that its decision regarding Sakhalin-2 will not affect its ability to supply gas to customers in line with existing contracts.
Shell Russian LNG project details
On June 30, Russian President Vladimir Putin signed a decree to transfer the property of Sakhalin Energy, the former operator of Sakhalin-2, to a new operator, Sakhalin Energy LLC. The government noted that foreign owners will be able to take a stake in the new operator in proportion to their equity in the old one. Shell owned 27.5% minus one share in Sakhalin Energy.
Earlier, two Japanese companies, Mitsui and Mitsubishi, agreed to transfer their respective stakes of 12.5% and 10% in Sakhalin Energy to the new operator, of which Russia’s state energy giant Gazprom owns 50%. Bloomberg analysts say Shell’s move could “hand even more energy revenue to Russia” if Gazprom absorbs Shell’s abandoned shares.
# Shell Russian LNG project #
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G7 to discuss Russian oil price cap – Bloomberg
The US and its allies hope the measure will reduce Moscow's revenues.
Finance ministers from the Group of Seven (G7) developed Western economies are planning to discuss the introduction of a price cap on Russian oil exports on Friday, Bloomberg reported on Thursday, citing US officials.
The measure is aimed at reducing Russian revenues from crude exports and easing the pressures the global oil market is currently facing.
“This is the most effective way, we believe, to hit hard at [Russian President Vladimir] Putin’s revenue and doing so will result in not only a drop in Putin’s oil revenue but also global energy prices as well… We’ll hear more on Friday how this is going to work, and it is not just us – it is also a partnership with our allies, the G7,” White House Press Secretary Karine Jean-Pierre was cited as saying.
According to earlier statements by the G7, which includes the US, UK, Canada, Japan, Germany, France, and Italy, it is looking at “options for a comprehensive ban on all services related to the shipping of Russian crude oil and petroleum products by sea around the world, unless the oil is purchased at or below the price to be agreed upon in consultation with international partners.”
However, it is not clear what the price cap would be, when it may be implemented, or how it would work. Russia had previously threatened to stop domestic oil production if it becomes unprofitable. The move would likely exacerbate the global energy crisis.
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