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Thursday, August 11, 2022

Japan denies possible pullout from joint Russia gas project

Japan has no intentions to withdraw from a joint Russian oil and gas project, despite joining strong penalties on Moscow for its Ukraine incursion, Prime Minister Fumio Kishida said Thursday.

Energy resource-poor Japan is striving to combine its need for fossil fuels with toeing a hard line on Russia, and has faced criticism about its continuing engagement in the Sakhalin-2 project.

After Russia started its war in Ukraine last month, oil giant Shell stated it will sell its 27.5 percent interest in Sakhalin-2 in Russia’s far east.

But Kishida claimed the project was helping to offer “long-term, economical and steady LNG supplies” to Japan. “Our plan is not to withdraw.”

Japan’s Mitsui has a 12.5 percent interest in the project, while Mitsubishi owns 10 percent. It is 50-percent owned by Russian energy firm Gazprom.

Despite the decision, Japan would “continue to make measures to minimise our energy reliance on Russia” in accordance with G7 policy, Kishida said.
Tokyo has hammered Moscow for the invasion with a series of penalties on Russian organisations and people, including President Vladimir Putin.

Japan is largely reliant on imported fossil fuels, in part because several of its nuclear reactors have been offline since the Fukushima accident in 2011.
Russia provides more than eight percent of Japan’s LNG consumption, with Australian shipments accounting for around 40 percent of the Japanese market.

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