Japan will have to continue importing Russian liquefied natural gas (LNG) due to surging energy prices and limited prospects for rebooting nuclear plants, the Financial Times reported on Sunday, citing Japanese transportation giant Mitsui OSK Lines (MOL).
The company’s CEO, Takeshi Hashimoto, told the business daily that Japan lacks viable alternatives to Russian LNG, which it buys relatively cheaply under long-term deals, to secure its baseload power.
“We cannot use many nuclear power stations; therefore, the supply and demand balance of the power industry is quite tight,” the CEO said. “Nowadays, the spot market of both LNG and coal is quite expensive. That is one of the reasons why Japan is so reluctant to stop the LNG imports from Russia.”
According to Hashimoto, MOL plans to keep servicing Japanese gas buyers such as Tokyo Gas and Jera with imports from Russia. “Since Japanese buyers require Sakhalin-2 LNG, definitely we will try our best to continue our normal services regardless of Russian national policy.”
On Thursday, Russian President Vladimir Putin ordered the re-organization of the Far Eastern Sakhalin-2 LNG project, transferring ownership to a new domestic company. The move, which came in response to actions from ‘unfriendly states’, could force out Japanese investors Mitsui and Mitsubishi, which hold a 22.5% stake in the project.
Moscow said that in spite of the changes, supplies of LNG to the global market will continue unhindered. Nevertheless, the Japanese government has reportedly told residents and businesses in the Tokyo area to conserve energy to avert blackouts.
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