Shell notified the Russian government of its withdrawal from the Sakhalin-2 project

Moscow, 1 September — PRIME. The Anglo-Dutch energy Shell has notified the Russian government of its withdrawal from the Sakhalin-2 project, and is monitoring the situation with the LNG contract from the project, the company said.

“Shell will not participate in the new operator created by the Russian government to operate the Sakhalin II liquefied natural gas (LNG) plant. We have notified the Russian government and our Sakhalin Energy Investment Company partners that we will not acquire a stake in a new operator and reserve all of our legal rights,” the release said.

The company added that they have a contract for the supply of LNG from the project.

“We continue to monitor developments related to this contract and evaluate our options in accordance with legal requirements and agreements,” Shell said.

On June 30, Russian President Vladimir Putin signed a decree in connection with the unfriendly actions of foreign states, which ordered to change the operator of the Sakhalin-2 project to a new, Russian, legal entity. In the former operator, Sakhalin Energy, Gazprom owned 50% plus one share, Shell 27.5% minus one share, Mitsui 12.5%, Mitsubishi 10%.

The new operator, LLC Sakhalin Energy, was established on August 5 with a 50% stake in Gazprom Sakhalin Holding. Foreign partners have the right to stay in the project if they announce such a decision before September 5, and all contracts for the supply of LNG from the project must be renegotiated with the new operator. This week, the Russian government allowed Japanese companies Mitsui&Co and Mitsubishi Corporation to transfer their shares in the project.