Page 12 - AsianOil Week 16 2022

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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 The Japanese
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. government
to the forefront to secure LNG through co-oper- All of this has helped to push prices on exist-
ation with the private sector”. ing LNG supplies higher across the world, with will be actively
In coming to the forefront, it is understood some cargoes from the US that would otherwise
the Japanese government will be actively seek- have headed for Asia being rerouted to Europe seeking to invest
ing to invest in primarily LNG facilities and instead. However, despite the most recent com- primarily in LNG
related upstream projects geared towards sup- ments from Haguida, Japan continues to main-
plying them around the world to help further tain links to Russian LNG output via stakes facilities and
development of the industry. Haguida said the owned by Japanese companies in the giant
government was aiming to provide “risk money” Sakhalin-2 project in Russia’s Far East. related upstream
through the state-run Japan Oil, Gas and Metals Thus far there have been no indications
National Corp. (JOGMEC) for existing LNG that Mitsui & Co. and Mitsubishi will relin- projects.
projects that can quickly boost output via expan- quish their stakes in Sakhalin-2, even as other
sion, but gave no further details. foreign oil and gas companies abandon their
This comes as demand for gas across Asia investments in Russia. It is estimated that exit-
continues to increase, with Japan having been ing their stakes, which amount to a combined
the world’s largest importer of LNG for some 22.5% in the project, could result in losses far
time prior to being recently edged out by China. exceeding $5bn, with some sources suggesting
Japan is estimated to have imported 74.3mn the figure could be as high as $10bn. Mitsui
tonnes of the super-chilled fuel in 2021, while alone has already invested around $4 billion
China imported a record 78.9mn tonnes. in Sakhalin-2.™

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