Regional LNG: Tokyo Gas signs deal to buy LNG from Russia?s Sakhalin II

Tokyo Gas Co Ltd said on Monday it had signed a contract to buy up to 1.1 million tonnes of liquefied natural gas (LNG) from Russia's Sakhalin II field starting in 2007. Tokyo Gas, Japan's largest city gas firm, said the term of the contract would be 24 years from April 2007.

The Sakhalin II project, located off the eastern shore of Sakhalin Island in Russia's far east, is one of the largest gas fields in the world.

The agreement with Tokyo Gas is likely to give impetus to the Sakhalin II project, which is being developed by Royal Dutch/She, Japanese trading house Mitsui & Co Ltd, and Mitsubishi Corp.

Tokyo Gas said in a statement the agreement would mark Russia's first shipment of natural gas to Asia's far east and its first exports of LNG ever.

The agreement on the Sakhalin project, which is conveniently located off Japan's northernmost island of Hokkaido, comes at a time when Japanese firms are keen to diversify their sources of energy supply.

Tokyo Gas also imports LNG from countries such as Malaysia, Alaska, Brunei, Australia, Indonesia and Qatar under long-term contracts. (*)