Japan Eyes Russian Gas as China Holds Off

摘要

China is still holding off on signing a second major piped gas deal with Gazprom, but Japan may be interested in taking more Russian gas. Japan now buys 70% of the 10 million ton per year output of Russia's sole LNG plant, the two-train Sakhalin-2 in the Far East, in which Japanese firms Mitsui and Mitsubishi own a combined 22.5%. Bigger partners Gazprom and Royal Dutch Shell are considering building a third train to hoist capacity to 15 million tons/yr, and a Mitsui official says his company might invest, too. In the current price environment, brownfield projects are seen as a relatively quick and cheap way of adding liquefaction capacity, and Mitsui Moscow general director Hiroshi Meguro was quoted as saying on the sidelines of this month's Far East Economic Forum in Vladivostok that Mitsui might invest $1 billion in the expansion. According to Gazprom, Mitsui might also invest in the Russian firm's Sakhalin-3 upstream project, where the Yuzhno-Kirinskoye field is seen as a potential resource base for the plant expansion, despite being on a US sanctions blacklist, and has agreed to study potential joint LNG bunkering projects.