RusEnergy

MOSCOW, June 7 (RIA Novosti) -- Sakhalin Energy, the company that operates the Sakhalin II project providing natural gas to Asia, has almost completed the signing of all long-term, natural gas contracts, which include an increase in sales of liquefied natural gas to Japan, the Vremya Novostei daily said Tuesday. Sakhalin Energy (SE) said Monday that a contract had been signed with Toho Gas to increase annual liquefied natural gas deliveries by 0.2 million metric tons over the course of the next 20 years. This is the third commercial success for SE in the last seven days, the company's commercial director Ate Visser said. Japan will receive 0.8 million metric tons more liquefied natural gas per year (over $3 billion). SE signed even more lucrative contracts with Tokyo Gas (1.1 million metric tons of liquefied natural gas over 24 years), Tokyo Electric (1.5 million tons over 22 years), Kyushu Electric (0.5 million tons over 22 years), Baja Mexico (1.6 million tons over 20 years), and Kogas (1.5 million tons per year with a possible additional 0.5 million tons). The Japanese buying frenzy is motivated by projected mid-term Asia-Pacific liquefied gas price hikes. Experts think that liquefied natural gas will cost 75% more on Asian markets in five years. These estimates hinge on greater U.S. and European gas demand. North American liquefied gas futures now cost 50% more than those in Asia. Wholesale Asian buyers spend $234 per metric ton of liquefied natural gas (minus delivery costs). The same amount costs $345 per ton in the United States. Analysts think that a ton of liquefied natural gas will cost $400-430 per ton by 2010. The Sakhalin II project calls for developing the Piltun-Astokhsky and Lunsky deposits on the northeastern shelf of the island. The latter mostly contains gas, gas condensate, and oil. Both deposits together contain over one billion barrels (150 million tons) of oil and more than 500 billion cubic meters of natural gas.