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Gazprom Wants To Invest in Japan

Gazprom chief financial officer said the company considered investing in Japanese power utilities

“The commissioning of Russia’s first liquefied natural gas plant on Sakhalin Island and sales of the fuel to Japan gives us an opportunity for such investment in utilities, although we have no specific plans yet,” Andrei Kruglov said in an interview in Tokyo Friday.

Kruglov didn’t identify utilities for potential investment, he said companies with the closest access to gas end-users were attractive to Gazprom.

The Sakhalin-2 project has contracts to deliver LNG to nine Japanese power and gas utilities including Tokyo Electric Power Co. and Tokyo Gas Co., as well as a client in South Korea and one in North America.

To diversify its customers away from traditional European buyers into Asia, Gazprom is moving ahead with plans to develop 68 trillion cubic meters of potential reserves in East Siberia and on Sakhalin island, according to a company document distributed at a Tokyo press conference earlier.

Control of Sakhalin-2 In 2006, Gazprom took control of the Sakhalin-2 development from Royal Dutch Shell Plc. after regulators threatened to close the $22 billion project on environmental grounds in a move that underscored the Russian government’s increased control over its domestic resources.

Kruglov also said Gazprom is seeking global strategic investors who can buy and hold more than a 3 percent of its shares over the long term.

“Conservative investors such as pension funds and companies that can hold our shares for a long period of time must be our strategic partners,” he said. “But speculative investors seeking a short-term return, like hedge funds, may not be desirable partners.”

Source: Bloomberg

Author: Ksenia Kochneva