Business & Economy

Kishida confident Moscow’s decree will not affect Japan’s gas supply

Tokyo, Jul 1 (EFE).- Japanese Prime Minister Fumio Kishida said Friday that he trusts that the national gas supply will not be immediately affected by Moscow’s decision to transfer the Sakhalin-2 joint energy exploitation to a Russian entity.

“I don’t think liquefied natural gas will be stopped immediately due to the decree, but we will carefully monitor (Moscow’s) requirements and study with the operator how to respond,” Kishida told local media.

The Japanese prime minister reacted to the decree signed the day before by Russian President Vladimir Putin, which establishes the creation of a new state-owned operating company for the Sakhalin-2 gas exploitation, in which Russian and other foreign firms participate.

The decree, based on national economic and security interests, according to the Kremlin, gives foreign shareholders one month to notify whether to retain their stake in the new company, and if not, they would be stripped of their investments.

This could mean the forced exit of the Japanese firms with investments in Sakhalin-2, Mitsui and Mitsubishi Corporation, with 12.5 percent and 10 percent respectively of shares in the project.

In addition to the Japanese firms Sakhalin Energy, which currently manages the oil and gas project, is made up of the Russian company Gazprom (50 percent) and the British company Shell (27.5 percent.)

Shell has already declared its intention to leave the project in the wake of the Russian-initiated war in Ukraine and sanctions imposed on Moscow, but Japan aspired to remain in the consortium for energy security reasons.

Japanese imports of liquefied natural gas (LNG) from Russia accounted for 8.8 percent of the total in 2021, the vast majority (around 8 percent) coming from the Sakhalin-2 project, according to data from the Economy, Trade and Industry Ministry.

The Japanese economy, highly dependent on fossil fuel imports for its energy supply, has been suffering the impact of rising gas and oil prices as a result of the Russian invasion of Ukraine.

Japan also joined the sanctions of the international community to progressively stop its imports of crude oil from Russia, which account for a small part of its total purchases, although it decided to maintain gas imports to minimize the impact on its energy supply. EFE


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