Sakhalin Energy has ramped up LNG spot sales to China since 2022, expects increase in term contracts

YUZHNO-SAKHALINSK. Oct 2 (Interfax) - The Sakhalin-2 project has significantly increased spot sales of liquefied natural gas to China, Andrei Okhotkin, Commercial Director of Sakhalin Energy LLC, told reporters on the sidelines of the Sakhalin Oil & Gas Forum.

He said the export mix had changed to some extent since 2022.

"We have ramped up spot sales to China. We maintain all our long-term contracts, so the bulk of our cargoes still go to Japan. A good volume goes to Korea, as per our contracts. And the main spot cargoes go to China, with which we have established very close relations, and with all consumers - with the largest, even with the middle tier. So we are working very extensively with China," Okhotkin said.

He said during a session at the forum that relations with China would develop. "We are currently working with Chinese buyers on a spot basis, but these are already strong, good relations. I think that in the future we will have an increasing number of term contracts, this is already clear.

Okhotin said in a presentation that Sakhalin-2 met about 2.5% of global demand for LNG, 4% of the Asia-Pacific region's demand, 9.1% of Japan's needs (at times 10%), 3.8% of South Korea's and 3.7% of China's.

"We feel very comfortable and very stable in the region," he said.

"We are in the right place. Our advantage, of course, is geographical proximity: from us it is two days to Korea; three days, or four or five at most, to the southernmost islands of Japan; six or seven days to southernmost China," Okhotkin said.