Page 10 - AsianOil Week 01 2023

AsianOil POLICY AsianOil

Tokyo asks insurers to continue Russian LNG cover

JAPAN JAPAN’S government has asked the country’s generation, and almost all of it is imported in the
insurers to take on extra risk to continue pro- form of LNG. Furthermore, Japan is the biggest
viding marine war insurance for LNG carriers buyer of LNG from the Gazprom-led Sakhalin-2
in Russian waters, a senior official at the industry project in the Russian Far East, which covers 9%
ministry told Reuters. of the country’s overall imports. Japan receives
Tokio Marine & Nichido Fire Insurance, additional cargoes from the Novatek-operated
Sompo Japan Insurance and Mitsui Sumitomo Yamal LNG plant in the Russian Arctic.
Insurance on December 23 told shipowners that Tokio & Nichido, Sompo and Mitsui Sumi-
they would stop covering damage suffered by tomo all said on December 26 they were discuss-
ships in Russian wars from the start of this year. ing with other reinsurers to offer cover.
That was after reinsurance firms warned they “Securing LNG is the top priority for the gov-
would also no longer take on the risks of vessels ernment, and we asked insurance companies to
incurring damage from war. co-operate in this regard,” an official at the FSA
However, Japan’s Financial Services Agency told Reuters.
and Agency for Natural Resources and Energy Responding to the letter, Tokio & Nichido,
issued a joint letter to the country’s general insur- Sompo and Mitsui Sumitomo told the news
ance association requesting continued coverage agency they would continue trying to secure
for LNG tankers. more support from reinsurances for war
“The FSA and ANRE have asked insurers coverage.
to take actions to continue offering marine war Reinsurers usually renew their one-year con-
insurance for the shipowners to transport LNG tracts with insurance clients on January 1, which
from Sakhalin-2, as it is key for Japanese energy means that they have their first opportunity to
security,” the official said. reduce exposure since Moscow began its inva-
Natural gas is Japan’s biggest source of power sion of Ukraine in late February. ™

PROJECTS & COMPANIES

Thailand’s PTT stops gas project in Myanmar

MYANMAR THAILAND’S PTT Oil and Retail Business The Fund’s ethics council announced in
(PTTOR), a subsidiary of state-owned energy mid-December that the Fund would stop work-
PTTOR has a 35% company PTT, has announced that it will with- ing with the two Thai companies (and an Israeli
stake in Bright Energy. draw from an oil storage project currently under company, Cognyte, as well) for being connected
construction in neighbouring Myanmar. to human rights violations. The ethics coun-
PTTOR holds a 35% stake in Bright Energy, a cil said that the Thai companies had provided
joint venture formed in 2019 with the Myanmar income to the Myanmar junta that could have
firm Kanbawza Group. The joint venture has been used to fund military operations against
been constructing a large oil storage terminal and the persecution of civilians. The ethics
near Yangon, but PTTOR said it would suspend council said the Fund could not accept the risks
Bright Energy’s operations as well as construc- of doing business with companies that might
tion work at the terminal and also payments, directly or indirectly encourage human rights
according to a report by Reuters. violations in its business partners.
The withdrawal of PTTOR prompts the ques- The action taken by the Norwegian Fund
tion whether the project will be able to continue, prompted PTT to respond by saying in a state-
considering the fact that Myanmar’s military ment: “Respect for human rights is one of the
regime is subject to a number of international PTT Group’s most fundamental practices and
sanctions. Numerous important energy com- PTT is deeply concerned about the atrocities
panies have dropped their projects in Myanmar committed in Myanmar.”
since the military seized power almost two years However, Thailand’s PTT Exploration and
ago, among them TotalEnergies, Chevron, Pet- Production (PTTEP) continues to operate in
ronas, Mitsubishi, Shell and Woodside. several of Myanmar gas fields and exports the
PTTOR said it was stopping its involvement gas to Thailand. Myanmar accounts for some
because of the violence and unrest that the mili- 15% of Thailand’s gas consumption. Whether
tary coup has provoked in the country. the decision by the Norwegian Fund to stop its
But this follows a recent measure taken by investments in the Thai companies will have an
Norway’s Sovereign Wealth Fund – at $1.3 tril- impact of the PTTEP’s gas operations in Myan-
lion, the largest in the world – to halt its co-op- mar depends on how reliant the Thai energy firm
eration with PTT and PTTOR due to their is on foreign investment considering that it relies
relationships with the Myanmar junta. on Myanmar gas in a tight gas market. ™

P10 www. NEWSBASE .com Week 01 06•January•2023