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November 10, 2007
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Home / Issue Archive / 2007 / February #2 / Russia and Japan to strengthen partnership in energy sector

№ 2 (February 2007)

Russia and Japan to strengthen partnership in energy sector

Japanese authorities expressed their interest in buying pipeline gas from Sakhalin-1 energy project on Monday during Russian Government’s delegation’s official visit to Tokyo as a part of the ongoing discussion on a broad range of energy issues. Foreign minister Taro Aso told Russian Industry and Energy Minister Viktor Khristenko Japan would also look into the possibility of acquiring LNG from Sakhalin-1 project, reports Reuters. The agency stated the project is under pressure to switch to LNG, natural gas chilled to liquid state for transportation, as Asian end users often lack facilities to accept natural gas.

By Sergei Balashov

According to IA REGNUM, Japanese customers have already signed long term deals with World’s largest LNG project Sakhalin-2 to buy about 60% of its total exports. Russian gas monopoly Gazprom is currently in the process of purchasing a 50%+1 stake in the project which, according to the Russian Government, ‘guarantees the stability of gas and oil exports’. UPI reports the project is set to start operating in 2008 with the potential production capacity of 9.6 mil tons of LNG a year. 

Russia and Japan are expected to engage in detailed discussions on the subject this week with a deal expected to be reached by the end of March, Russian Prime Minister Mikhail Fradkov, also in Japan with an official visit, said on Tuesday. 

Russian authorities made it clear they intended to establish stronger ties with their Asian partners which would go beyond energy exports. Viktor Khristenko later made a proposal to Japanese Economy Minister Akira Amari to enhance cooperation by participating in state-owned oil company Rosneft’s project to construct an oil refinery at the Pacific Ocean terminal of the Eastern Siberia – Pacific Ocean oil pipeline, according to RosBusinessConsulting. RBC also reported Khristenko assured this initiative would be supported by the Russian Government also encouraging Japan to consider the possibility of building joint refineries to process and sell oil in the Japanese market. Itar-Tass quoted Khristenko asserting Russia ‘viewed these projects as very promising’. 

Energy related issues are only a part of the negotiations held between the two countries during Russia’s official visit to Japan and the states hope it’s only the beginning of a successful long term partnership. 

“We have all necessary objective prerequisites for effective economic cooperation: the economy of Russia and Japan is on rise, we’ve seen growth in bilateral trade turnover, businesses are interested in new mutually beneficial projects,” said Russian President Vladimir Putin in a note he sent to Japanese Prime Minister Shinzo Abe, according to Itar-Tass. “Business communities are called to play a key role in enriching the gamut of economic cooperation, moving the already available groundwork to practical implementation,” he added.

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Copyright © 2007 Eurasia Press (www.eurasiapress.com)