Page 6 - AsiaElec Week 16 2022

AsiaElec GAS GENERATION AsiaElec

Japan to increase investment in

overseas LNG infrastructure

JAPAN
THE government of Japan has announced a imposed by the European Union and US mar-
range of initial measures aimed at increasing kets beginning to bite.
LNG supplies to the archipelago to help offset Similar moves to sanction Moscow and
energy concerns raised by the ongoing Russian expulsions of Russian diplomats in the past few
offensive in Ukraine, and subsequent sanctions days are being made in Japan as senior govern-
by many of the world’s leading oil and coal ment officials move to show Japan falling in
consumers. line with their allies in Washington and across
Speaking to the Reuters news agency after Europe.
making the announcement, the nation’s Minister This in turn has helped push prices on exist-
of Economy, Trade and Industry (METI), Koi- ing LNG supplies higher across the world, much
chi Haguida, said “Russia’s invasion of Ukraine to the consternation of long term users in Asia
has intensified competition for purchasing as some LNG exports from the United States
LNG, raising concerns about stable supply of the are now winding their way across the Atlan-
fuel for Japan,” before going on to say that “The tic to European customers instead of making
government needs to come to the forefront to the longer, more expensive journey across the
secure LNG through cooperation with the pri- Pacific.
vate sector.” However, despite the most recent comments
In coming to the “forefront” as Haguida from METI Minister Haguida, Japan continues
announced, it is understood Japanese lawmak- to maintain links to Russian LNG output with
ers will be actively looking to invest primarily large scale shares in two of Russia’s most promi-
in upstream LNG projects around the world to nent Far East projects: Sakhalin 1, and Sakhalin
help further development of the industry, despite 2.
investment in, and subsequent production of All indicators in Tokyo show the ruling Lib-
LNG, having declined in recent years. eral Democratic Party intent on holding on to
And despite many nations moving away from these facilities despite pressure from the EU and
LNG investments altogether to help achieve net- US.
zero goals, demand across Asia according to ana- With the national government and big name
lysts is currently on the increase with Japan now firms in Japan including industrial powerhouses
the world’s biggest importer of the fuel. Mitsui and Mitsubishi registered as owners
Figures posted by Tokyo in recent years have of 22.5% of Sakhalin 2, any pullout now could
shown Japan now imports in excess of 227 mil- result in losses far exceeding US$5 billion.
lion tons annually. Some sources say this figure could be as
Of that total, Russian LNG makes up almost high as $10 billion; Mitsui alone having already
9% of Japan’s total, making Moscow’s neighbour invested around $4 billion in Sakhalin 2.
in the east a crucial source of US dollars for the Consequentially, future moves by Japan to
Kremlin at a time foreign currency supplies are abandon either project have for the time being
drying up. Russia also supplies around 3.6% of been ruled out by industry analysts in the coun-
crude imported by Japan. try, especially as the cost of post-withdrawal
To this end, as a result of the Ukraine war, LNG imports are forecast to jump by as much as
competition for LNG supplies is now on the 33% if such a move is made.™
increase, especially with sanctions on Russia

P6 www. NEWSBASE .com Week 16 20•April•2022