⚠ Russia: Two LNG Projects It Cannot LeaveModerate threat

Mitsui & Co. (8031) — threat to the moat

Mitsui is locked into two Russian LNG projects, one marked down and one backed by guarantees it is provisioning against.

Mitsui has two Russian LNG investments and has exited neither. It holds 12.5% of Sakhalin II through MIT SEL, alongside Gazprom's 77.5% and Mitsubishi's 10%1, and a stake in Arctic LNG 2 through Japan Arctic LNG2. The company says its Russian LNG businesses are affected by the Russia-Ukraine situation3 and that Sakhalin II is exposed to high geopolitical risks due to the nature and situation of the business4.

Russian LNG exposure, March (¥ bn)65.0Sakhalin II value 202558.8Sakhalin II value 202657.8Arctic LNG 2provision 202566.1Arctic LNG 2provision 2026Mitsui results and Annual Securities Report 2026
One stake marked down, one provision marked up.

The accounting shows the cost so far. Mitsui carries Sakhalin II at ¥58,840 million, down from ¥65,012 million a year earlier5. For Arctic LNG 2, it has recorded a provision for loss on financial guarantees of ¥66,109 million, up from ¥57,759 million6: it guaranteed loans for a project that cannot operate normally under sanctions.

The measure is the Arctic LNG 2 guarantee provision. It has risen by ¥8.4 billion in a year7; further increases would show the guarantees being called.

The number that tests this threat
Reported
Arctic LNG 2 guarantee provision
¥66.1bn against ¥57.8bn a year earlier

The cost of guarantees on a sanctioned project; each increase is money Mitsui expects to pay.

Source: Mitsui & Co. Annual Securities Report 2026 ↗
References
  1. ReportedIt holds 12.5% of Sakhalin II through MIT SEL, alongside Gazprom's 77.5% and Mitsubishi's 10%, and a stake in Arctic LNG 2 through Japan Arctic LNG.
    Mitsui & Co., results presentation for the year to March 2026 - producing assets with partners and stakes, LNG projects, affiliates and power contracts. — FY to March 2026 · publ. 1 May 2026 · source ↗
  2. ReportedIt holds 12.5% of Sakhalin II through MIT SEL, alongside Gazprom's 77.5% and Mitsubishi's 10%, and a stake in Arctic LNG 2 through Japan Arctic LNG.
    Mitsui & Co., results presentation for the year to March 2026 - producing assets with partners and stakes, LNG projects, affiliates and power contracts. — FY to March 2026 · publ. 1 May 2026 · source ↗
  3. ReportedThe company says its Russian LNG businesses are affected by the Russia-Ukraine situation and that Sakhalin II is exposed to high geopolitical risks due to the nature and situation of the business.
    Mitsui & Co., Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - the JA Mitsui Leasing and Mainstream losses, the Russian LNG exposure, the Strait of Hormuz and the sensitivities. — FY to March 2026 · publ. 1 May 2026 · source ↗
  4. ReportedThe company says its Russian LNG businesses are affected by the Russia-Ukraine situation and that Sakhalin II is exposed to high geopolitical risks due to the nature and situation of the business.
    Mitsui & Co., Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - the JA Mitsui Leasing and Mainstream losses, the Russian LNG exposure, the Strait of Hormuz and the sensitivities. — FY to March 2026 · publ. 1 May 2026 · source ↗
  5. ReportedMitsui carries Sakhalin II at ¥58,840 million, down from ¥65,012 million a year earlier.
    Mitsui & Co., Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - the JA Mitsui Leasing and Mainstream losses, the Russian LNG exposure, the Strait of Hormuz and the sensitivities. — FY to March 2026 · publ. 1 May 2026 · source ↗
  6. ReportedFor Arctic LNG 2, it has recorded a provision for loss on financial guarantees of ¥66,109 million, up from ¥57,759 million: it guaranteed loans for a project that cannot operate normally under sanctions.
    Mitsui & Co., Annual Securities Report for the year to March 2026 (English) - company history, employees, share price history, total shareholder return, equity production, the revenue of the Singapore trading subsidiary, competition and the Arctic LNG 2 guarantees. — FY to March 2026 · publ. 12 August 2026 · source ↗
  7. Moat Explorer calcIt has risen by ¥8.4 billion in a year; further increases would show the guarantees being called.
    Moat Explorer calculation from Mitsui & Co.'s reported figures. Resource share of profit: (253.6 + 164.2) / 834.0 = 50.1% (2026), 51.0% (2025), 58.0% (2024). Iron ore business share: 262.2 / 834.0 = 31.4%. Trailing twelve months to June 2026: net income 833,971 - 191,647 + 294,052 = 936,376; revenue 13,995.2 - 3,299.9 + 4,347.6 = 15,042.9; EPS 291.12 - 66.68 + 103.73 = 328.17. P/S at March year-ends: 5,340.8 / 11,757.6 = 0.45 (2022), 0.44 (2023), 0.80 (2024), 0.55 (2025), 16,969.0 / 13,995.2 = 1.21 (2026). Share price change since March: 5,033 / 5,959 - 1 = -15.5%. Shares issued, split-adjusted: 3,284.7 million (March 2022) to 2,864.7 million (March 2026) = -12.8%. Equity-method profit and dividend income: 447.4 + 178.7 = 626.1, 57.6% of profit before tax of 1,087.1. Segment profit over segment assets, year to March 2026: Mineral & Metal Resources 253.6 / 4,313.2 = 5.9%; Machinery & Infrastructure 225.9 / 4,427.3 = 5.1%; Energy 164.2 / 4,181.4 = 3.9%; Chemicals 67.5 / 2,241.8 = 3.0%; Lifestyle 52.0 / 3,091.1 = 1.7%; Innovation & Corporate Development 59.0 / 2,655.3 = 2.2%; Iron & Steel Products 18.9 / 862.4 = 2.2%. Innovation & Corporate Development including other and adjustments: 59.0 + 20.7 - 27.7 = 51.9 (2026), 87.3 - 42.8 + 21.5 = 65.9 (2025), 53.8 + 5.6 - 5.9 = 53.6 (2024). A $10 move in iron ore: 10 x ¥3.0 billion = ¥30 billion, 3.3% of the ¥920 billion forecast. Berkshire's market value over cost: 8,785 / 3,490 = 2.52 times; dividend on cost 201 / 3,490 = 5.8%. Progress against guidance: 294.1 / 920.0 = 32.0%. Profit growth since the year to March 2016's loss: from -83.4 to 834.0. Resource profits: 335.1 + 281.7 = 616.8 (2024) and 253.6 + 164.2 = 417.8 (2026). Three largest segments: (253.6 + 225.9 + 164.2) / 841.1 = 76.5%. Energy Trading Singapore: 1,986,458 / 13,995,222 = 14.2%. First-quarter one-time gains: (44.2 + 10.2) / 294.1 = 18.5%. Innovation & Corporate Development first quarter against plan: 65.2 / 70.0 = 93%. Arctic LNG 2 provision change: 66,109 - 57,759 = 8,350. A $1 move in US gas: 10 x ¥1.2 billion = ¥12 billion. Vale dividend: 35.0 / 59.6 - 1 = -41%; 43.5 / 35.0 - 1 = +24%. Truck leasing holding: 19.8 / 28.4 - 1 = -30%; 18.8 / 19.8 - 1 = -5%. Profit to the 2029 target: 1,100 / 834.0 = 1.32; to the 2031 vision: 1,400 / 834.0 = 1.68. Berkshire value over cost 2.52 and dividend yield on cost 5.8%. Ministers North at full production: 7% x 20 Mt = 1.4 Mt. Mainstream charges: 15.1 + 15.9 + 28.05 = 59.05. Vale dividend fall against segment profit: (59.6 - 35.0) / 285.4 = 8.6%. Mitsui against smaller houses: profit 936.4 / 619.1 = 1.51 and 936.4 / 575.9 = 1.63; value 14.63 / 8.51 = 1.72 and 14.63 / 8.09 = 1.81. Trailing P/E: 14.63 trillion / 936.4 billion = 15.6; P/S 14.63 / 15.043 = 0.97. Dividend growth: 115 / 27.5 = 4.2 times. — FY to March 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Mitsui & Co.'s results, integrated report, securities report and market data; operands shown in the source line.
Sources
Generated September 24, 2026