Kogas, Japanese buyers say not using US-sanctioned Gazprombank for Sakhalin 2 LNG imports

State-run Korea Gas and several Japanese buyers of Sakhalin 2 LNG said Nov. 22 that they are not using the US-sanctioned Russian Gazprombank for their settlements, seeing no impact on their liftings from the project in Russia’s Far East.

A Kogas official told S&P Global Commodity Insights that South Korea’s sole importer of Sakhalin 2 LNG, with an annual lifting contract of 1.5 million mt/year, does not see any impact from the US sanctions as it is not using Gazprombank.

“Kogas has nothing to do with Gazprombank, so we see no impact from US sanctions,” the Kogas official said, declining to elaborate further.

Japan’s largest power generation company JERA currently sees no impact on its lifting of Sakhalin 2 LNG as Gazprombank is not involved in its transactions related to Sakhalin 2, a company spokesperson said.

Tohoku Electric does not see any impact on its Sakhalin 2 LNG imports from the US sanctions on Gazprombank, as it has moved away from using the Russian bank for its settlements, a company spokesperson told Commodity Insights on Nov. 22.

A Kyushu Electric spokesperson also said it does not expect any impact from US sanctions on its liftings of Sakhalin 2 LNG, even beyond June 2025, as it does not use the Russian bank for its settlements.

Speaking at a press briefing in Tokyo, Osaka Gas President Masataka Fujiwara said that the company does not see any impact from the US sanctions on Gazprombank for its Sakhalin 2 LNG imports, as it does not use the Russian bank for its settlements.

JERA has a long-term contract to lift 2 million mt/year of Sakhalin 2 LNG, while Tohoku Electric lifts 420,000 mt/year of Sakhalin 2 LNG. Kyushu Electric lifts 500,000 mt/year and Osaka Gas takes in 200,000 mt/year. More than half of the 9.6 million mt/year LNG production capacity at Sakhalin 2 is committed to Japanese offtakers.

The US Treasury Department said Nov. 11 that it has issued a license allowing energy transactions involving some otherwise sanctioned entities, but it did not update the list to allow transactions with Gazprombank. It did, however, issue a license valid until Dec. 20, allowing the winding down of transactions involving Gazprombank and other sanctioned institutions.

The Treasury also issued a license allowing crude oil imports from the Sakhalin-2 oil and gas project in Russia to Japan until June 28, 2025. The license stipulates that the so-called Sakhalin-2 byproduct is solely for import into Japan.

Asked about Japan’s Sakhalin 2 LNG imports beyond the June 28, 2025 expiry, Minister of Economy, Trade and Industry Yoji Muto said that the country intends to continue explaining the importance of the project for its energy security to the US and other G7 countries.

“We will take all possible measures to ensure stable supply to Japan, while continuing to explain [the country’s position] in detail,” Muto told a press conference in Tokyo.

On Nov. 21, the Biden administration took another step to bolster Ukraine’s war effort by sanctioning Russia’s Gazprombank, its six foreign subsidiaries, as well as dozens of other financial institutions and officials — a move that could impact Russia’s gas exports.
Source: Platts