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Russia move on Sakhalin-2 thrusts Japan into an energy dilemma

Loss of 10% of LNG imports would worsen summer power crunch

A Sakhalin Energy employee at the Sakhalin-2 gas liquefaction plant in Russia's Far East. Mitsubishi Corp. and Mitsui & Co. could be forced to sell their stakes in Sakhalin Energy.   © Reuters

TOKYO -- Russia's decision to wrest control of the Sakhalin-2 energy project has brought Japan closer to losing a valuable fuel supply right at a time when the country's electrical grid can least afford it.

Russian President Vladimir Putin signed an order Thursday mandating Sakhalin-2 assets be transferred to a newly established Russian company. The oil and natural gas development project in Russia's Far East, which includes Japanese trading houses Mitsui & Co. and Mitsubishi Corp. as investors, accounts for about 10% of Japan's liquefied natural gas imports.

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