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Business deals

Mitsui confirms talks for stake in Russian LNG project

Saudi Aramco and Russia sovereign wealth fund also reportedly interested

A tanker at Novatek's Yamal LNG project. (Photo courtesy of Novatek)

TOKYO -- Japanese trading house Mitsui & Co. told Nikkei on Saturday that it is in talks to buy a stake in Novatek's Arctic LNG 2 project, as it weighs various investments in Russian gas developments.

The Russian gas company aims to start operations at Arctic LNG 2 around 2022 or 2023, producing about 19.8 million tons of liquefied natural gas a year. It has already sold a 10% stake in the project to French oil major Total in order to help cover its estimated $25.5 billion in costs.

Novatek is considering selling off another 30%. Saudi Aramco and the Russian Direct Investment Fund, a sovereign wealth fund, are also in talks for a piece of the pie, Reuters reported Friday. The size of each investment has yet to be decided.

Mitsui may also take part in other Russian gas projects, including the expansion of Sakhalin 2 and a new development off the Baltic coast. Because the seas around Arctic LNG 2 would freeze during the winter, lifting transportation costs, Mitsui will closely examine the profitability of investing there before making a final decision.

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