TOKYO, July 1 (Reuters) - Japanese trading house Mitsui & Co and state-owned JOGMEC are still in talks with trading firm Mitsubishi Corp over the latter joining a venture that will take a stake in Russia’s Arctic LNG-2 project, Mitsui said on Monday.
Novatek PAO, Russia’s biggest private gas producer, said on Saturday it had agreed to sell a 10% stake in Arctic LNG-2, a upcoming project to liquefy natural gas in Russia, to a joint venture comprising JOGMEC - formally known as Japan Oil, Gas and Metals National Corp - and Mitsui.
Russian President Vladimir Putin told a news conference on Saturday that the Japanese investments in the project would reach almost $3 billion. Arctic LNG-2 will become the third liquefied natural gas (LNG) project for Novatek, which hopes to match Qatar in production of the super-chilled fuel.
Mitsui declined to comment on terms of the deal, but said the joint venture’s investment would include 10% of the total development cost of Arctic LNG-2, estimated by Novatek at $21-23 billion, as well as the cost of the 10% stake itself.
“We are still talking with Mitsubishi on its possible participation in our joint venture,” Taichi Nagino, general manager of Mitsui’s Russia gas business division, told reporters on Monday.
A Mitsubishi spokesman confirmed that the Japanese trading house is still considering whether or not it would invest in the project. Mitsubishi said last month it was studying the project, but nothing has been decided.
Mitsui and JOGMEC will buy the stake through a Dutch-based joint venture, of which JOGMEC owns 75% and Mitsui the rest. The venture plans to take about 2 million tonnes of LNG a year from the project, Mitsui’s Nagino said.
“We will start looking for buyers from now. We want to seek an optimal marketing strategy by taking advantage of the Arctic LNG-2’s position to be able to be a swing supplier to Europe and Asia,” he said.
Novatek announced in April the sale of 20 percent of the Arctic LNG-2 project to two Chinese companies, and in March it agreed to sell a 10% stake to France’s Total.
Reporting by Yuka Obayashi Editing by Kenneth Maxwell