Page 9 - AsianOil Week 08 2023

AsianOil PIPELINES & TRANSPORT AsianOil

Japan may import Sakhalin Blend to

ensure supply of Sakhalin 2 LNG

JAPAN JAPAN would consider importing crude oil request [for Sakhalin 2 crude] but we will likely
from Russia’s Sakhalin 2 project in order to take a certain action in the event of facing needs
Japan is the biggest ensure a supply of LNG from the project if it to ensure stable LNG supply,” Kito said. “We
customer of Sakhalin became necessary, Shunichi Kito, president of will likely consider Russian crude oil imports
LNG. the Petroleum Association of Japan and CEO as an exception,” he added. Kito suggested that
of refining giant Idemitsu Kosan, said during a in view of the trouble of arranging payments,
press conference in Tokyo on February 15. shipping and insurance, Japanese refiners
Since the start of Russia’s invasion of Ukraine would do better to seek crude supplies from
a year ago, Japan has kept in line with a decision other sources.
by the Group of Seven (G7) nations to ban Russia Japan adopted the $60 per barrel price cap
oil imports. Japan has refrained from importing placed on Russian crude exports by the G7 and
Russian crude since May last year and its two Australia last year, and would likely face no con-
main refiners ENEOS and Idemitsu Kosan have sequences if it imported Sakhalin 2 crude in
not signed any new crude contracts. order to keep LNG exports moving.
Japan, along with South Korea, was once According to Japan’s Ministry of Economy,
one of the largest customers for Sakhalin Blend Trade and Industry, Sakhalin 2 LNG covers
crude, and Japanese companies have kept their around 9% of Japan’s total LNG imports and
shareholdings in Sakhalin 2 LNG for the sake of accounts for 3% of the country’s power produc-
the country's own energy security. Should the tion. The Russia facility produces some 9.6mn
flow of crude exports at the Sakhalin 2 project tonnes per year (tpy), about half of which goes
be interrupted and full storage tanks halt crude to Japan.
production, it would also stop the production Russian crude imports into Japan fell by 60%
of LNG, hitting Japanese supply. To ensure that during 2022 to an average of some 35,000 bar-
does not occur, Japan would purchase Sakhalin rels per day, prompting a growth in the country's
2 crude to maintain hydrocarbon output. reliance on Middle Eastern crudes to 94% of all
“At present, we do not have any formal crude imports. ™

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