Sakhalin Energy Faces LNG Delivery Delays as State Takes Over and Banks Align

Sakhalin Energy, the new operator of the Sakhalin-2 oil and gas project, has halted LNG deliveries to at least one Asian buyer. Bloomberg reports that the change comes as the state takes over the project’s property on August 19, transferring control from Sakhalin Energy Investment Company Ltd to the government. In the wake of the transfer, potential suppliers were invited to sign fresh LNG supply agreements and to make payments through Gazprombank. Yet several counterparties balked at the revised terms, and that includes one of the Asian buyers previously purchasing Sakhalin gas. Bloomberg notes that the industry is watching carefully as buyers weigh the risks and recheck the contractual documents with their legal teams before deciding whether to proceed under the new framework and with the Russian lender involved. The outcome could usher in a period of strained supply negotiations and broader market uncertainty that buyers and traders are now assessing against the backdrop of Russia’s evolving role in energy exports.