Jiji Press ST. PETERSBURG (Jiji Press) — General trader Mitsui & Co. and state-linked Japan Oil, Gas and Metals National Corp., or JOGMEC, are slated to reach a basic agreement with Russian gas giant Novatek to invest in a Russian liquefied natural gas project in the Arctic, informed sources said Thursday.
Mitsui President Tatsuo Yasunaga will exchange memorandums of understanding with the Novatek side on Friday, on the sidelines of an international economic conference in St. Petersburg from Thursday, according to the sources.
Prime Minister Shinzo Abe hopes to leverage Japanese investment in the Russian gas project, known as Arctic LNG 2, to push forward negotiations with Moscow to resolve a territorial row over four Russian-held islands.
The Japanese government will support the investment through JOGMEC.
The Japanese investment is expected to reach several hundred billion yen eventually.
Abe is likely to highlight the investment when he holds bilateral talks with Russian President Vladimir Putin on the fringes of a Group of 20 summit in Osaka late this month.
The $25.5 billion Arctic LNG 2 project is designed to start gas production around the Yamal Peninsula in the Arctic around 2023, with an annual output capacity of 19.8 million tons.
Novatek, while taking a 60 percent stake in the LNG project, has been soliciting investments in the remaining 40 percent.
Of the 40 percent, French oil giant Total SA has acquired 10 percent, while Chinese oil company CNOOC Ltd. and a China National Petroleum Corp. subsidiary have decided to take a total of 20 percent.