Mitsui says monitoring impact of US sanctions on Arctic LNG 2 project

Mitsui & Co., a Japanese trading company, announced on November 3 that it is closely monitoring the impact of the US government’s sanctions on the Arctic LNG 2 project. The US announced sweeping new sanctions against Russia on November 2, targeting the Arctic LNG 2 project among other entities.

Mitsui invests in Arctic LNG 2 through Japan Arctic LNG, a Dutch corporation 75% owned by the Japan Organization for Metals and Energy Security and 25% owned by Mitsui.

“While we will closely examine the impact of Arctic 2 being sanctioned, we will take appropriate measures observing the rights and obligations of J-Arc and Mitsui, under various agreements including the shareholders agreement,” the Japanese company said. “We will comply with laws and regulations, including sanctions taken by the international community, and will take appropriate measures in cooperation with stakeholders including the Japanese government.”

The company said that as of now, there is no change to the full-year forecast for the fiscal year ending March 2024, or to its shareholder returns policy. The company’s exposure to the Russian LNG business as of September 30, 2023 is as follows: the balance of investments and loans related to the Arctic LNG 2 project is 17.2bn yen ($110mn), and the balance of guarantees is 251.7bn yen. In addition, a provision of 19.9bn yen has been recorded for the guarantees, therefore the net balance of investments and loans, and guarantees after deducting the provision is 249bn yen.

Arctic LNG 2 is led by Russian Novatek, which holds a 60% stake. Apart from Japan Arctic LNG, other shareholders include French energy major TotalEnergies, China’s CNPC, and CNOOC.