Tokyo Electric to buy extra LNG from Shakalin Energy

Japan's utility firm Tokyo Electric will buy an extra 0.3 million tonnes of liquified natural gas (LNG) a year from Royal Dutch/Shell-led Sakhalin Energy, the Russian venture was quoted by Reuters as saying Friday.

Tokyo Electric (TEPCO) will now buy 1.5 million tonnes of LNG under a long-term deal, adding further momentum to Sakhalin Energy's $10-billion project to build the world's biggest LNG plant on the remote Russian Far East island of Sakhalin by 2006.

"In addition, Tokyo Electric has decided to declare up to 0.7 million tonnes of additional early volumes in 2007 and 2008," Sakhalin Energy, which operates the Sakhalin II project, said in a statement.

Before the latest announcement, the group had said volumes of natural gas sold from Sakhalin II had reached 3.1 million tonnes a year for periods in excess of 20 years.

Kyushu Electric, Tokyo Gas and Toho Gas have already signed LNG deals with Sakhalin.

The Shell-led group, which also includes Japanese trading house Mitsui & Co Ltd and Mitsubishi Corp , has been producing oil on Sakhalin since 1999 and hopes to produce 9.6 million tonnes of LNG annually and to capture a quarter of the east Asian market by 2010.(*)