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Japanese trading houses Mitsui and Mitsubishi have decided to retain their stakes in the newly formed Russian entity, which operates the Sakhalin-2 liquefied natural gas (LNG) project in the Russian Far East, reported Reuters.

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The decisions by the two firms follow a request made by the Japanese Government to the trading houses to ‘think positively’ about joining the new Russian entity.

Japan considers the Sakhalin-2 LNG project a key source for its stable energy supplies amid market disruptions, following Russia’s invasion of Ukraine.

Referring to the deadline of 4 September 2022, a Mitsubishi spokesperson was cited by the news agency as saying: “A resolution was passed this morning regarding the submission of a consent to take a stake. The consent will be filed by the deadline.

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“We have decided to retain our stake in the Sakhalin-2 project.”

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In June 2022, Russian President Vladimir Putin took charge of the Sakhalin-2 project in Russia’s far east, resulting in the creation of a new Russian entity, Sakhalinskaya Energiya LLC.

Russia’s state gas company Gazprom received a more than 50% stake in the new entity, which owns all rights and obligations of the previous project operator, Sakhalin Energy Investment.

The remaining stake in the new firm is also held by it until the other existing shareholders apply for a stake.

Shell and the two Japanese trading companies owned stakes of less than 50% in Sakhalin Energy Investment. Mitsui and Mitsubishi jointly owned a 22.5% stake in the project.

The latest move by the Japanese firms also follows a Russian government decree, signed earlier this month, allowing stake claims by foreign investors in the Sakhalin-2 project within a one-month period.

The stake, otherwise, would be assessed and sold by the government to a Russian entity.

In the wake of Russia’s military war against Ukraine, Shell decided to withdraw from the Sakhalin-2 project months ago. It has since been in talks with potential buyers.