Japan’s Nikkei Asia reported yesterday that the giant Sakhalin 1 and Sakhalin 2 oil and natural gas projects in eastern Russia, which include hefty investments by Japanese companies as well as other foreign investors, will be paying their dividends Chinese yuan. Japan is very unhappy with this development, but there isn’t much they can do about it.
Japan’s major investors in the Sakhalin projects chose to maintain their participation, despite the anti-Russian sanctions, since Japan is heavily dependent on Sakhalin LNG. According to Japan’s Ministry of Economy, Trade and Industry, LNG supplied from Sakhalin 2 accounts for roughly 9% of Japan’s total LNG imports, which amounts to 3% of the country’s total electricity supply. If that were cut off, Japan’s economy would be in serious trouble.
