Putin Signs a Decree to Take Over LNG Plant in a Counter Move Against the West

The Russian President Vladimir Putin on Thursday added fuel to an economic war with the western countries by signing a decree to seize full control of the Sakhalin-2 gas and oil project in the far-eastern Russia.

This fresh decree will create a new firm to take control of all rights and obligations of Sakhalin Energy Investment Co, which is held by Shell (RDSa), Mitsui and Mitsubishi just under 50% stake. Meanwhile, state-run Gazprom is now holding a 50% plus one share stake in Sakhalin-2, which produces about 4% of the world’s liquefied natural gas (LNG).

The move could force Shell and the two Japanese corporates out, adding more volatility in the already tight LNG market.