Page 12 - GLNG Week 16 2022

GLNG ASIA GLNG

Japan to increase investment in

overseas LNG infrastructure

INVESTMENT THE government of Japan has announced a Russian LNG makes up almost 9% of Japan’s
range of initial measures aimed at increasing total imports, making the Asian country a cru-
LNG supplies to the country. The move is aimed cial source of income for the Kremlin at a time
at helping offset energy supply concerns against foreign currency supplies are drying up. Russia
the backdrop of the ongoing Russian war in also supplies around 3.6% of the crude imported
Ukraine, and the resulting sanctions against by Japan.
Moscow brought in by many of the world’s lead- As a result of sanctions, as well as Europe’s
ing oil and coal consumers. push to lessen its dependence on Russian gas in
Speaking to Reuters after making the the wake of the war in Ukraine, competition for
announcement, Japanese Minister of Economy, LNG supplies is now on the increase. Moves to
Trade and Industry Koichi Haguida said that tighten sanctions on Moscow and expel Russian
“Russia’s invasion of Ukraine has intensified diplomats have taken place in Japan over the
competition for purchasing LNG, raising con- past few days as senior government officials have
cerns about stable supply of the fuel for Japan”. sought to show that the country is falling in line
He added that the government “needs to come with its Western allies.
to the forefront to secure LNG through co-oper- All of this has helped to push prices on
ation with the private sector”. existing LNG supplies higher across the world,
In coming to the forefront, it is understood with some cargoes from the US that would
the Japanese government will be actively seek- otherwise have headed for Asia being rerouted
ing to invest primarily LNG facilities and related to Europe instead. However, despite the most
upstream projects geared towards supplying recent comments from Haguida, Japan contin-
them around the world to help further devel- ues to maintain links to Russian LNG output
opment of the industry. Haguida said the gov- via stakes owned by Japanese companies in the
ernment was aiming to provide “risk money” giant Sakhalin-2 project in Russia’s Far East. Thus
through the state-run Japan Oil, Gas and Metals far there have been no indications that Mitsui &
National Corp. (JOGMEC) for existing LNG Co. and Mitsubishi will relinquish their stakes
projects that can quickly boost output via expan- in Sakhalin-2, even as other foreign oil and gas
sion, but gave no further details. companies abandon their investments in Russia.
This comes as demand for gas across Asia It is estimated that exiting their stakes, which
continues to increase, with Japan having been the amount to a combined 22.5% in the project,
world’s largest importer of LNG for some time could result in losses far exceeding $5bn, with
prior to being recently edged out by China. Japan some sources suggesting the figure could be as
is estimated to have imported 74.3mn tonnes high as $10bn. Mitsui alone has already invested
of the super-chilled fuel in 2021, while China around $4 billion in Sakhalin-2.™
imported a record 78.9mn tonnes.

P12 www. NEWSBASE .com Week 16 22•April•2022