UPDATE 1-Russia gas export head sees decision soon Sakhalin-2 expansion

Tue Oct 25, 2011 11:11am BST

Quotes

   

* Shell, Mitsui, Mitsubishi have preferential right for train 3 LNG plant

* Russia supplied Japan with extra 325,000 T of LNG since quake -Medvedev (Adds details)

TOKYO Oct 25 (Reuters) - The Gazprom-led Sakhalin-2 consortium, which includes Anglo-Dutch major Royal Dutch Shell (RDSa.L), is expected to make a decision soon on building a third liquefied natural gas (LNG) train at the Sakhalin-2 project, Russia's gas export chief said on Tuesday.

"We expect that a decision of expansion of Sakhalin-2 project, the train 3 LNG plant, will be taken soon," Gazpromexport's chief executive, Alexander Medvedev, told an industry forum on Tuesday.

He added that stakeholders in the Sakhalin-2 project, including Shell, Mitsui & Co and Mitsubishi , would have a preferential right to participate in the expansion.

Sakhalin-2, Russia's only active LNG project, is producing 10 million tonnes per year, and Gazprom and partners have been in talks to build a third train to increase capacity by 50 percent, a prospect made more likely by the Japanese nuclear disaster which has boosted demand for LNG. [ID: nLDE75010N]

Medvedev said Gazprom has delivered five extra LNG cargoes to Japan from the Pacific LNG plant in addition to its contractual obligations following the nuclear disaster at Fukushima, adding that it stood ready to meet short-term demand at the world's top LNG consumer.

"All in all, Gazprom has supplied Japan with an extra 325,000 tonnes of liquefied natural gas," he said.

Japan's LNG imports are set to jump 12.2 percent to 78.6 million tonnes this year and to 81.6 million tonnes in 2012, a Reuters poll of analysts showed.

Japanese utilities have been aggressively buying LNG from suppliers further afield, including Norway, Nigeria and Equatorial Guinea, after the massive quake in March triggered the world's worst nuclear disaster in a quarter century and left much of Japan's nuclear power offline. (Reporting by Osamu Tsukimori; Editing by Joseph Radford and Edmund Klamann)