Japan’s energy situation fragile after Putin seizes Sakhalin-2 gas field
Thursday’s sudden announcement by Russia that President Vladimir Putin had signed a decree handing the rights to the Sakhalin-2 oil and gas project to a new Russian company has caused alarm in the Japanese government.
About 60 per cent of the liquefied natural gas (LNG) produced by Sakhalin-2 in Russia’s far east goes to Japan. Tokyo has stated that Japan will not withdraw from the project, with Prime Minister Fumio Kishida saying that it is “an extremely important project from the standpoint of energy security”.
Putin’s move triggered fears that Japanese and other foreign companies may have to abandon their stake in the project.
Deputy Chief Cabinet Secretary Seiji Kihara said on Friday, “Japan’s interests in resources must not be lost. We are currently scrutinising the treatment of interests held by Japanese companies and the impact on LNG imports.”
Mitsubishi Corp, a shareholder of the Sakhalin-2 operating company, commented, “We are aware of the presidential decree and are discussing how to respond to it in cooperation with the government and our business partners, but production is continuing at present.”
Fellow Japanese shareholder Mitsui & Co commented, “We are aware of the news reports, and are in the process of confirming the contents of and facts about the presidential decree.”
LNG from Sakhalin-2 accounts for 3 per cent of the electricity supply in Japan, according to the Economy, Trade and Industry Ministry. If supply were to be disrupted, Japan’s tight situation in power supply-demand would be inevitably worsened.
The Japan News
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