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Putin says Gazprom ready to invest in Japanese gas infrastructure

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Moscow (Platts)–29Apr2013/1218 pm EDT/1618 GMT

Russia’s gas giant Gazprom is ready to invest in construction of new gas infrastructure in Japan, Russia’s President Vladimir Putin said Monday after talks with Japan’s Prime Minister Shinzo Abe in the Kremlin at which the two countries discussed joint projects in the energy sector, among other issues.

Abe is in Moscow for the first such top-level visit in a decade, which aims at improving relations between the two countries that have been strained over a territorial dispute since World War 2.

The two countries have failed to sign a peace treaty since the war as Japan claims four islands in the Kuril islands chain, located north of Japan’s Hokkaido island.

During the Monday visit, the parties agreed “to make all efforts to overcome the disagreements,” Abe told a joint briefing, referring to a joint communique signed Monday.

“We, with President Putin, have agreed to accelerate the negotiations,” he said.

During the same briefing, Putin said that it is logical for the two neighboring countries to cooperate in the energy sector.

“Russia has such hydrocarbons reserves that they can allow Russia to meet Japan’s demand without affecting our traditional partners and domestic needs,” Putin said.

Russia and Japan could cooperate in hydrocarbons production and jointly build a natural gas liquefaction plant, Putin said.

In addition, Gazprom “is ready to invest its resources in new gas receiving facilities in Japan, [and] to invest in gas pipelines in Japan,” Putin said.

The state-controlled gas giant is also ready to consider building additional facilities in Russia to export power to Japan, Putin said.

The two countries could also cooperate in construction of LNG tankers, he added.

Japan is already one of the key buyers of LNG from Russia’s first and to date only LNG plant, a 9.6 million mt/year facility on Sakhalin Island.

The partners are actively discussing the expansion of Russian LNG exports to Japan, following the launch of the Vladivostok LNG plant in Russia’s Far East in 2018.

In February, Gazprom’s board approved a final investment decision for the Vladivostok LNG plant, following a study carried out alongside Japanese companies.

Gazprom expects the Vladivostok LNG plant to see initial capacity of 15 million mt/year, potentially rising to 25 million mt/year.

Japan is the world’s largest LNG buyer, importing a record 87.3 million mt of LNG in 2012, up 11% year-on-year, according to Japan’s Ministry of Finance.

The country’s LNG imports soared following the March 2011 Fukushima nuclear disaster and subsequent nuclear outages in the country.

Apart from Gazprom, Russia’s biggest oil producer Rosneft is also discussing expansion of cooperation with Japanese companies.

In late February, Rosneft’s CEO Igor Sechin visited Japan to discuss possible joint projects, including upstream cooperation offshore Russia.

Rosneft is already in partnership with Japanese companies Marubeni, Inpex, Itochu and Japex in the Sakhalin 1 offshore project, through the Sodeco venture, which holds a 30% stake in the project.

Rosneft (20% in the project) and the project operator ExxonMobil (30%) recently agreed to consider construction of an LNG plant in Russia’s Far East.

–Nadia Rodova, nadia_rodova@platts.com –Edited by Alisdair Bowles, alisdair_bowles@platts.com

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Taken from Platts: http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/21990727

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This entry was posted on April 29, 2013 by in News Articles and tagged , , , , , , , .
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