Japan warns of ‘interests’ after decree on Russian gas project

TOKYO, July 1, 2022 (AFP). JapanRussia’s energy interests “should not be undermined,” Tokyo said on Friday after Moscow issued a decree transferring operations for a key oil and gas project to a new Russian company.

Japanese trading houses Mitsui and Mitsubishi Corp own 12.5 and 10 percent, respectively, in the Sakhalin-2 project, but after the Russian decree, the future of their investments looks uncertain.

It calls for the creation of a new Russian operator and requires existing foreign shareholders to apply for participation in the new firm, with Moscow taking the decision to include them.

Japanese government spokesman Seiji Kihara said on Friday that Tokyo is “taking a close look at the impact on liquefied natural gas imports.”

“Generally speaking, we believe that our resource interests should not be infringed,” he added, declining to comment further.

Poor energy resources Japan relies heavily on LNG imports and previously ruled out exiting the Sakhalin II project despite joining Western-led energy sanctions against Russia over its invasion of Ukraine.

Representatives of Mitsubishi and Mitsui would only say that the firms are studying the details of the decree in consultation with the government.

Another major participant in the project is oil giant Shell, which has already pledged to sell its 27.5% stake.

Japan heavily dependent on fossil fuel imports, in part because many of its nuclear reactors were shut down after the Fukushima accident in 2011.

Russia supplies almost nine percent JapanLNG needs in Australia, with Australian exports accounting for about 40 percent of the Japanese market.

Japan record heat is currently sweltering, and the government has issued several warnings in recent days of power outages in the Tokyo area.

On Friday, a three-month period began in which residents are asking to conserve electricity for fear of power shortages during the summer heatwave.

sf / sah / cwl