Japan Still Views Russia's Sakhalin Projects As Vital For Energy Security - White Paper

TOKYO (UrduPoint News / Sputnik - 06th June, 2023) Japan once more stated that Russian projects Sakhalin-1 and Sakhalin-2 are essential and vital for its energy security in an annual report on energy (Energy White Paper 2023), published by the Japanese Agency for Natural Resources and Energy on Tuesday.

"As for the projects Sakhalin-1 and Sakhalin-2, which are Russia's and Japan's fuel and LNG (liquefied natural gas) projects, the Sakhalin-1 is Japan's important source of oil shipments outside the middle East ... the Sakhalin-2 provides nearly 9.5% of Japan's LNG import ... which makes them indispensable sources for Japanese energy and gas consumption. Therefore, these projects are vital in terms of energy security," the document said.

Japan expects the excess of demand over supply on the world market of LNG to persist until circa 2025, when a series of new projects would be launched in the world.

"We suggest that even if the LNG projects which are under construction now will be launched without delays, the level of supply will not keep up with the demand until approximately 2025.

Before that time, the global 'competition for the LNG' will only increase," the report stated.

Japan's company Sodeco, a half of which is owned by the Japanese government, holds 30% of the Sakhalin-1 project. The project was almost suspended after its then-operator, company Exxon Neftegaz Limited, announced its desire to withdraw from the project in March 2022, and later imposed the force majeure regime the following month. In October, Russian President Vladimir Putin ordered the creation of a new domestic operator for the Sakhalin-1 project under supervision of Russia's oil giant Rosneft.

The Sakhalin-2 project is exploring two reserves in Russia's Far East in the northeast of the Sakhalin shelf in the Okhotsk Sea. The infrastructure includes three offshore platforms, an integrated onshore processing facility, an oil shipping terminal and an LNG plant with a capacity of 9.6 million tonnes per year. Sakhalin-2 accounts for about 9% of Japan's LNG imports.