RNS Number:1830L
Mitsubishi Corporation
16 May 2003

Translation of report filed with the Tokyo Stock Exchange on May 15, 2003



                                                                    May 15, 2003

                                                          Mitsubishi Corporation



          Decision Made on Phase II Development of Sakhalin II Project



Sakhalin Energy Investment Co., Ltd. (Headquarters: Yuzhno-Sakhalinsk, Sakhalin,
Russian Federation), established by Mitsubishi Corporation, the Royal/Dutch
Shell Group of Companies and Mitsui & Co., Ltd. in 1994, today announced its
decision to invest in the Phase II Plan of Development for the Sakhalin II
Project. Simultaneously, it made a Declaration of Development Date based on an
agreement with the Russian Federation. Now poised to move into a full-scale
development stage, Sakhalin Energy Investment plans to begin year-round crude
oil production in 2006 and LNG the following year.



The decision to go ahead with the Phase II project is based on progress in sales
activities conducted by Sakhalin Energy Investment directed at LNG buyers,
mainly Japanese power and gas utilities. A basic agreement was recently reached
with Tokyo Gas Co., Ltd. for the sale of LNG under a long-term contract. In
addition, Sakhalin Energy Investment is in the final stages of negotiations for
long-term contracts with several other LNG buyers.



In Phase I project, commercial production of crude oil began in the summer of
1999. Thus far, 40 million barrels of crude oil have been produced and sold. In
Phase II project, oil and natural gas exploration will be carried out from new
offshore drilling and production platforms in the Piltun-Astokhskoye and
Lunskoye fields. The oil and gas will be transported via pipelines approximately
800 kilometers long to Prigorodnoye on the southern tip of Sakhalin Island.
Crude oil will be shipped from a new oil export terminal and natural gas will be
liquefied at and exported from a new LNG plant and export terminal. These
planned facilities will enable year-round deliveries of crude oil and LNG to
Japan and elsewhere in the Asia-Pacific region. The total cost is estimated at
approximately US$10 billion.



Plans call for 60 million barrels of crude oil and 9.6 million tonnes of LNG to
be produced annually at peak times after Phase II project is developed. For
this, 2 LNG trains, each with an annual capacity of 4.8 million tonnes, will be
constructed, with completion scheduled for 2007 and 2008. Among the largest in
the world, the 2 trains will have a combined annual production capacity
equivalent to around one-sixth of the LNG that Japan currently imports per year.
And with estimated recoverable reserves of approximately 1.1 billion barrels of
crude oil and 17 trillion cubic feet of natural gas, the Piltun-Astokhskoye and
Lunskoye fields rank as world-class. The natural gas reserves are sufficient to
supply LNG for over 30 years at an annual rate of production of 9.6 million
tonnes. Significantly, of the world's foremost LNG projects, the Sakhalin II
Project is the closest to Asia. With its enormous recoverable reserves, this
important natural resource development project will thus have a major part to
play in stabilizing energy supplies in Japan and elsewhere in the Far East. Also
noteworthy is that the Sakhalin II Project marks the first time that the Russian
Federation, which has been supplying its European neighbors with natural gas
through pipelines for many years, will have a hand in supplying gas on a large
scale to Asian countries.



As Sakhalin Energy Investment advances this project, it will continue to
sufficiently take into consideration its environmental footprint as well as its
social and economic impact.



Mitsubishi Corporation has been stepping up the pace of investments in energy
and natural resources under its Portfolio Management Strategy, a key element of
the company's growth strategy announced as part of its medium-term management
plan in 2001. Crude oil and LNG production in Phase II of the Sakhalin II
Project is a pivotal aspect of Mitsubishi Corporation's energy business
strategy. LNG in particular is a lynchpin of this strategy. The additional
capacity from the Sakhalin II Project will augment rights Mitsubishi Corporation
already holds to LNG produced at projects in Brunei, Malaysia, Australia and
Oman, further cementing the company's ability to generate earnings as one of the
leading LNG suppliers in the world.



About Sakhalin Energy Investment Co., Ltd.

1.      Headquarters: Yuzhno-Sakhalinsk, Sakhalin, Russian Federation

2.      CEO: Steve H. McVeigh

3.      Established: April 1994

4.      Main business line: Development of Sakhalin II Project

5.      Shareholders: Royal/Dutch Shell Group of Companies (55%), Mitsui & Co.,
Ltd. (25%) and Mitsubishi Corporation (20%)


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