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12 May, 2009 16:00

Tokyo visit paves way for new business relationship

The entourage of Prime Minister Putin’s Tokyo visit has clinched a range of business deals between Russia and Japan, with bilateral trade set to boom.

Japan and Russia are set to start a new chapter in their business relationship after a series of new finance and energy deals were clinched in Tokyo during a visit by PM Vladimir Putin.

The two nations have signed a long-delayed deal on supplies of Russian uranium to the Japanese power industry, which will almost double the amount of nuclear fuel delivered to Japan. RusAtom head, Sergei Kirienko, hailed the agreement, noting it paved the way for more.

“This delivery of low-enriched uranium for Japanese nuclear plants is huge volumes, worth hundreds of millions of dollars. We have contracts already signed for ten years, its a sum of several billion dollars. Moreover, today have an agreement between Tenex -company representing RusAtom – and Toshiba on possibility of building a uranium-storage facility in Japan.”

Oil and gas were also high on the agenda. Japan’s Oil Gas and Metals corporation is to form a joint venture with Irkutsk oil to develop two oilfields in Eastern Siberia, and Russia and Japan will jointly build a gas processing factory worth some $900 million in Russia's republic of Tatarstan. The cooperation also extends to renewable energy, with Japan’s J energy set to build a huge new windpower plant near Vladivostok in a deal worth around $100 million.

VTB CEO Andrey Kostin, added that the visit also opened financial doors

“We see several areas for cooperation such as attracting debt financing in the form of syndicated loans, and the placement bonds of Russian companies and banks. In particular, VTB plans to place so-called samurai bonds – issued under the rules of Japanese stock market.”

The deals signed today represent the start of a renewed business relationship. But the potential remains for more, with an investment decision on the ESPO pipeline by Japan still ahead.