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Royal Dutch Shell Plc .com: Japan Chubu Elec to buy LNG from Shell’s Sakhalin 2


TOKYO, July 12 (Reuters) – Chubu Electric Power Co. has agreed to buy liquefied natural gas (LNG) from the Royal Dutch Shell-led Sakhalin 2 project in Russia’s far east, an industry source said on Wednesday.

Chubu Electric, Japan’s third-largest utility, said it would hold a briefing on its LNG purchase at 2 p.m. local time (0500 GMT).

Chubu Electric had long been in talks with those running the giant Sakhalin-2 project, which is 55 percent-owned by operator Royal Dutch Shell (RDSa.L: Quote, Profile, Research), and a purchase agreement had been widely expected.

Japan’s Mitsui & Co. holds 25 percent of the project, and Mitsubishi Corp. has 20 percent.

The 9.6 million-tonne-per-year project is expected to start shipping LNG in the summer of 2008, and about 76 percent of the output has already been committed to customers in Japan, South Korea and the United States.

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