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- Mitsui & Co., Ltd.
Corporate Communications Division
Sakhalin Energy Investment Company Ltd. (Sakhalin Energy), a company jointly owned by OAO Gazprom (Gazprom), Royal Dutch Shell plc (Shell), Mitsui & Co., Ltd. (Mitsui) and Mitsubishi Corporation (Mitsubishi) with Mitsui holding a 12.5% stake, signed a US$1.4 billion project finance contract with a consortium of international commercial banks. Nippon Export and Investment Insurance (NEXI), an export credit agency owned by the Japanese government, will provide overseas united loan insurance (investment and loan insurance for natural resources and energy). Based on the project finance contract and the NEXI insurance, the consortium banks will provide Sakhalin Energy with fund totaling US$1.4 billion. In this context, Mitsui, along with other shareholders of Sakhalin Energy, signed a sponsor guarantee contract providing guarantees for the loan until the completion of the project.
Sakhalin Energy already signed a US$ 5.3 billion project finance contract with Japan Bank for International Cooperation (JBIC) and a consortium of international commercial banks in June, 2008 to fund a part of the development cost of the project. The US$1.4 billion this time is additional funding and will be used to finance the completion of the full scope of works of the Sakhalin-2 Phase II project, including the ongoing drilling program for gas and oil production.
This additional funding will contribute to the stability and economics of the project and, eventually to the energy security of Japan.
Mitsui, as a shareholder of Sakhalin Energy, regards the signing of this additional project finance contract as a significant milestone of the Sakhalin II project and will continue to support Sakhalin Energy for its stable supply of the oil and LNG.
Sakhalin is a new world-class oil and gas province, with estimated resources of some 45 billion barrels oil equivalent (boe). Sakhalin II is one of the largest integrated oil and gas projects in the world, with total resources of some 4 billion boe.
Sakhalin Energy Investment Company Ltd is the investor and operator of the Sakhalin II Project. Shareholders of the company are OAO Gazprom (50%+1 share), Royal Dutch Shell plc (27.5%-1 share), Mitsui & Co., Ltd. (12.5%) and Mitsubishi Corporation (10%). In 1999, Sakhalin II started oil production of about 90,000 barrels per day during the production season as the Phase 1, and in December 2008 and March 2009, full year oil production and LNG production (Phase 2) started respectively. Peak oil production will reach some 150,000 barrels per day, and LNG production capacity is 9.6 million tons per year. The planned LNG production has been sold under contract to customers across the Asia-Pacific region.
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