Gazprom and Japan have discussed the possibility of gas supply rise

Gazprom and the representatives of the Parliament of Japan have discussed the perspectives of growing the gas supply to Japan including on the account of the pipeline gas supply, Gazprom reports.

The deputy chairman of Gazprom OAO, CEO of Gazprom export OAO, A. Medvedev and the delegation of the Democratic Party of Japan headed by the delegate of the House of Representatives, chairman of the Party Council of policy study, S. Maekhara met in Moscow on Thursday. The issues of the current cooperation of Gazprom and the Japanese companies were discussed at the meeting as well as the perspective directions of the joint work.

The parties discussed the successful cooperation of Gazprom, Mitsui & Co. Ltd and the Mitsubishi Corporation in the framework of the Sakhalin-2 project including the additional LNG supplies after the tsunami and earthquake in Japan in 2011. The successful cooperation connected with the pipes supply from Japan for the construction of the “Sakhalin-Khabarovsk-Vladivostok” and Nord Stream gas pipelines was mentioned.

The participants of the meeting considered the perspectives of growing the natural gas exports from Russia to Japan in the framework of expansion of the LNG production in Sakhalin and realization of the LNG plant’s construction in Vladivostok. The parties discussed the possibility of pipeline gas supply from Russia to Japan, it is reported.

Mr. Medvedev said that the projects realized by Gazprom with foreign partners are to be mutually profitable. It is the basis of our work, he added.

On Thursday Mr. Maekhara said that Japan studies the opportunity of laying the gas pipeline from Russia as the alternative to the Russia’s LNG supply not excluding the possibility of laying the gas pipeline on the bottom of the sea. Following the results of the studies it was said to be possible to lay the pipeline.

Japan is the 4th in the world in terms of energy consumption and it has very little of its own energy resources. The country consumes about 80 bln cubic meters of gas a year. The stake of gas in the energy consumption of Japan is 14%. The country imports 100% of the consumed gas in the form of LNG being the 1st in the world by its imports.

Japan is the main consumer of LNG from Sakhalin (Sakhalin-2) – about 65% of the production by the project is contracted by the 4 largest electric generating and 5 gas companies of Japan by the long-term contracts for more than 20 years. The stake of the Sakhalin gas in the volume of LNG consumption in Japan is about 8%.

In Jan 2011 Gazprom OAO and the Agency for natural resources and energy of Japan signed an agreement on cooperation for the preparation of the joint technical and economic study of the variants of using the natural gas in the area of Vladivostok, transportation and natural gas realization and products of processing from the area of Vladivostok to the potential buyers in the Asian –Pacific region. At the present time Gazprom and the consortium of the Japanese companies Japan Far East Gas, which comprises Itochu, Japex, Marubeni, Inpex and Cieco, work out the project of the gas liquefaction plant’s construction in the area of Vladivostok. In March 2012 the management of Gazprom OAO decided to work out the justification of investment into the LNG plant’s construction in the area of Vladivostok in Q1 2013.

According to a source close to the participants of the project, Gazprom and the consortium of the Japanese companies assess the investment into the LNG plant’s construction in Vladivostok at $7 bln, the pay back period – 7-8 years. The plant is planned to be put into operation in 2016 and from 2017 it will produce 10 mln tons of LNG which will be supplied to Japan and South Korea at the volume of 7 and 3 mln tons respectively.
Translated by Galiya Musabekova 

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