Russia-based independent natural gas producer Novatek is reportedly planning to acquire Shell’s former 27.5% stake in the Sakhalin-2 energy project, for RUB94.8bn ($1.16bn).
Novatek to acquire Shell’s stake in Sakhalin-2. (Credit: Jethro Carullo on Unsplash)
The Russian government has approved the sale, citing a government order dated 12 April, reported Reuters.
Russian President Vladimir Putin gave his consent for the transfer of funds to Shell, according to the Russian daily Kommersant report.
It is the latest update in a series of events that took place after Russia’s invasion of Ukraine in February last year.
Located on Sakhalin Island, Russia, Sakhalin-2 is one of the largest integrated oil and LNG projects in the world, the first offshore gas project and the first LNG plant in Russia.
It was operated by Sakhalin Energy Investment, a joint venture between Russian state-owned firm Gazprom (50%), Shell (27.5%), Mitsui (12.5%) and Mitsubishi (10%).
In February last year, when Russia attacked Ukraine, Shell announced its plans to withdraw from its joint ventures with Gazprom, including Sakhalin-2.
In July, the Russian government issued a decree, creating a new company, dubbed Sakhalinskaya Energiya, to take over the project from Sakhalin Energy Investment.
Shell, together with its Japanese companies Mitsui and Mitsubishi were given one month to claim their stakes in the project.
The British oil and gas company said that it was exposed to a $1.6bn impairment related to Sakhalin-2 in the first quarter of 2022.
In August, Japanese power generation company JERA signed an agreement to maintain stable liquefied natural gas (LNG) supplies from the Sakhalin-2 project in Russia.
Moscow invited companies interested in acquiring Shell’s stake, along with Exxon Mobil’s abandoned share in the Sakahlin-1 project, reported Reuters.
