The shareholders of Sakhalin Energy Investment Company
Ltd. (Sakhalin Energy), operator of the Sakhalin II project, today signed a
Sale and Purchase Agreement with OAO Gazprom (Gazprom) to trigger the transfer
of shares in Sakhalin Energy Investment Company Ltd. (SEIC), the operator of
the Sakhalin II project.
This transaction implements a protocol signed on December
21, 2006 in Moscow. Under its terms Gazprom acquires a 50% plus one share stake
in Sakhalin Energy for $7.45 billion in cash. The other three shareholders,
Royal Dutch Shell plc (Shell), Mitsui & Co. Ltd (Mitsui) and Mitsubishi
Corporation (Mitsubishi), each dilute their stakes by 50%, to receive a proportionate
share of the purchase price.
Gazprom will now hold 50% plus one share, Shell
27.5%, Mitsui 12.5%, and Mitsubishi 10%.
With the conclusion of the deal, Sakhalin
II is moving to firmly establish its position on the global energy map as a
reliable new energy source.
In addition, through the Area of Mutual Interest
(AMI) arrangement with Gazprom, the prospects for expansion of Sakhalin II through
further LNG processing trains are enhancedIn addition, the Ministry of Natural
Resources of the Russian Federation had announced its approval of the revised
Environmental Action Plan (EAP) on 16 April. Sakhalin Energy prepared
that plan with input from all shareholders. It also provides targets and
action points for conservation of biodiversity of Sakhalin Island, including
fish stocks and rare flora and fauna species.
Gazprom Deputy Chairman Alexander
Medvedev said, "Gazprom's entry into Sakhalin II is a powerful impetus
for implementation of this large scale development in the area of energy export
to Asia Pacific and North America. In turn, it will facilitate the company's
strategy of phased entry into the global LNG market."
Director, Exploration and Production, Malcolm Brinded said: "Gazprom’s entry
into the Sakhalin Project is warmly welcomed. Combined with the government
acceptance of the Environmental Action Plan, this is another important step
for Sakhalin II. The AMI should create additional growth opportunities for the
partners in the future."
Mitsui's Executive Director and Executive Vice President,
Hiroshi Tada said: "Mitsui is pleased to welcome Gazprom to the Sakhalin II
team. With the entry of Gazprom as Sakhalin Energy major shareholder, we are
confident that in cooperation with the Russian Government, can bring this first
Russian frontier LNG project to completion, as scheduled, for delivery of LNG
to out customers in Japan, Korea and the United States. The milestone achieved
today will no doubt contribute to further strengthening of the relationship
between Russia and Japan, and will pave the way towards future development in
Mitsubishi's Senior Executive Vice President, Hisanori Yoshimura
said: "Mitsubishi welcomes Gazprom into the Sakhalin II Project as a majority
shareholder. I trust that this new combination of shareholders is the
best team to accomplish timely start-up of LNG delivery to important customers
in Japan, Korea, and North American West Coast. This is an important step towards
Sakhalin Energy becoming the key LNG supplier for Asia Pacific market."
Sakhalin II project
Sakhalin is a new world-class oil and gas province,
with estimated resources of some 45 billion barrels oil equivalent (boe). Sakhalin
II is the largest integrated oil and gas project in the world, with total resources
of some 4 billion boe.
Sakhalin II today has production
capacity of 80,000 boe per day during the production season. The subsequent
phase of the development
will take the total project capacity to 395,000 boe per day, including
9.6 million tones per year of LNG production.
The second phase of the project
is over 80% complete. More than 17,000 workers
are currently employed in the construction of the project, of which around 70%
are Russian nationals. The planned LNG production has been sold under contract
to customers across the Asia-Pacific region. .
Sakhalin II includes the following elements:
- Offshore production facilities including the Molikpaq platform (PA-A), the new PA-B and Lun-A platforms and some 300 km of offshore pipelines;
- An onshore processing facility to take the gas and crude oil from both fields;
- Two 800 km of onshore oil and gas pipelines to the south of the island;
- An oil export facility capable of year-round operation;
- The first LNG plant and associated export facilities built in Russia;
- Island infrastructure upgrades, such as roads, bridges, rail, port, airport, and medical facility upgrades.
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest annual report on Form 20-F, which has been filed with the U.S. Securities and Exchange Commission.
This press release is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.