Page 11 - AsiaElec Week 27 2022

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Japan has no choice but to buy

Russian LNG, says MOL chief

JAPAN JAPAN has no choice but to continue to pur- week the Russian government announced that it
chase Russian LNG, the president and chief would take control of the Sakhalin-2 LNG pro-
executive of Japanese shipping conglomerate ject in which Japanese companies hold 22.5 %.
Mitsui OSK Lines said last week in an interview It remains to be seen how this will affect
with the Financial Times. According to Takeshi future Russian-Japanese energy relations.
Hashimoto, the high costs of energy and the lim- “Since Japanese buyers require Sakhalin-2
ited chance of restarting Japan’s nuclear power LNG, definitely we will try our best to con-
industry, Japan is in a position where its options tinue our normal services regardless of Russian
are limited. national policy,” Hashimoto said, adding that
“We cannot use many nuclear power stations; MOL intended to continue to service Japanese
therefore the supply and demand balance of the buyers of Russian LNG, such as Tokyo Gas and
power industry is quite tight. Nowadays, the spot Jera.
market of both LNG and coal is quite expen- Japan imported a total of 74.32mn tonnes of
sive. That is one of the reasons why Japan is so LNG in 2021, with Russian LNG accounting for
reluctant to stop the LNG imports from Russia,” roughly 9% of the country’s total LNG imports,
Hashimoto told the London daily. according to Japan’s Ministry of Finance. Most
The dangers posed by Japan’s Fukushima Russian LNG imports comes from the 9.2mn
nuclear power plant (NPP) in the wake of the tonne capacity at Sakhalin-2, where Japanese
2011 earthquake and Tsunami has prompted off-takers account for nearly half of the liftings.
the closer of Japan’s nuclear facilities and there is MOL plays an important role in Russia’s
little public support to re-start them despite the LNG exports by transporting the frozen gas on
country’s serious energy crunch. ice-breaking ships from the LNG export facility
Japan buys Russian LNG usually under long- on the northern Yamal Peninsula to consumers.
term contracts that provide cheaper prices in MOL’s fleet numbers about 700 ships, including
order to secure its baseload power. At this point, LNG and oil tankers, plus car carriers, dry bulk
Japan has few alternative energy sources. cargo vessels and container ships.
ussia’s invasion of Ukraine has prompted The shipping firm last year ordered three
Western-aligned countries like Japan to take ice-breaking tankers for use with Russia’s Arc-
economic measures against Moscow, which has tic LNG 2 project, the first phase of which is
responded with its own counter-steps by cutting expected to be completed by next year. Arctic-2
natural gas supplies to some countries and offer- LNG is a three-phase $23bn project. Each phase
ings of cheaper oil and gas prices to others. Last has a 6.6mn tonne per year (tpy) capacity.™

Week 27 06•July•2022 www. NEWSBASE .com P11