Japan’s Mitsui Committed to Complying with US Sanctions on Arctic LNG 2 project

“We are aware of the new U.S. sanctions and we remain committed to complying with international sanctions,” Mitsui told Reuters in emailed comments, adding that he was in contact with his project partners, the Japanese government and other parties “to discuss next steps”.

The sanctions do not apply to the project itself or its shareholders.

However, a Japanese government source said they could complicate how Mitsui and another Japanese shareholder, JOGMEC, support the project and could also delay production of Arctic LNG 2.

They apply to a number of Russian companies and one UAE company providing architectural, construction and engineering services.

They also apply to a Russian shipbuilding company that will operate two floating LNG storage units for Arctic LNG transshipments via the Northern Sea Route, as well as two storage vessels intended to operate on this route.

The Arctic LNG 2 project in the Russian Arctic is operated by Russian company Novatek, while Mitsui and Japanese company JOGMEC hold a combined 10% stake.

JOGMEC did not immediately respond to a Reuters request for comment outside of business hours on Saturday. Novatek did not respond to a Reuters request for comment.

Novatek plans to launch the first production train of the Arctic LNG 2 project towards the end of the year. Mitsui and JOGMEC together are expected to receive 2 million tonnes of LNG per year.

The nearby Yamal LNG plant came online in 2017.

The Arctic LNG 2 project is designed to operate three production lines with an annual production capacity of 19.8 million tonnes.

Japan has condemned Russia’s invasion of Ukraine – which Moscow calls a “special military operation” – but retains stakes in a number of large fossil fuel projects in Russia over energy security concerns. The country imports almost all of its energy.