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. Last Updated: 07/27/2016

Shell Has Buyers for Sakhalin Gas

Royal Dutch Shell's venture on Sakhalin Island in the Far East has sales commitments for all the liquefied natural gas it plans to produce, President Vladimir Putin told an economic forum Monday in Tokyo.

Supplies from Sakhalin will help meet growing demand for LNG in Japan and South Korea, the world's two largest buyers, as well as China.

With oil trading at more than $50 per barrel, utilities are switching to natural gas, which emits fewer pollutants when burned. LNG is natural gas cooled to a liquid for shipment by tanker.

Shell's Sakhalin Energy is building a 9.6 million-ton-per-year LNG plant on Sakhalin Island, part of the $20 billion Sakhalin-2 oil and gas project.

LNG deliveries will start in the summer of 2008, about eight months behind schedule, Shell said in June.

"We have sold 75 percent of our liquefied natural gas under long-term contracts of 20 years or more to customers in Japan, Korea and North America, and are in discussions with potential customers for the remaining quantity," company spokesman Ivan Chernyakhovsky said by telephone Monday.

The company planned to have sales commitments for all of its LNG by the end of this year, Chernyakhovsky said in June.

Putin said one-third of the gas from Sakhalin-2 would go to Japan.