Japan, Russia Affirm Cooperation in East Siberia Energy Projects

TOKYO (Dow Jones Newswires), October 22, 2008

Japan and Russia will cooperate closely on energy projects, especially in resource-rich East Siberia, the Japanese Ministry of Foreign Affairs said Wednesday.

Resource-poor Japan has been trying to diversify its sources of energy imports since 2005 when energy prices started surging, and Russia was considered significant to the effort due to its geographical proximity.

Japanese Foreign Minister Hirofumi Nakasone and Russian Minister of Industry and Trade Viktor Khristenko signed a memorandum in Tokyo late Tuesday under the eighth meeting of the bilateral Intergovernmental Commission on Trade and Economic Affairs.

In the memorandum, both parties expressed interest in joint exploration, development, production and marketing.

The memorandum praised the progress of the Sakhalin-2 project, including a $5.3 billion syndicate loan led by Japan Bank for International Cooperation to the project.

The Sakhalin-2 liquefied natural gas project is expected to start delivery in early 2009. Most of the 9.6 million metric tons of output will be sold to Japanese and Korean natural gas users under long-term contracts.

Back in late 2005, Russia's OAO Gazprom and Japan's Agency for Natural Resources and Energy, a unit of the Japanese Ministry of Economy, Trade and Industry signed an agreement to boost cooperation between Japanese companies and Gazprom.

In line with the agreement, government-funded Japan Oil, Gas and Metals National Corp. started oil exploration work in East Siberia together with Russia's United Oil Group Ltd. earlier this year.

Tuesday's memorandum cited those instances of energy cooperation between Japan and Russia and said the efforts augur well for the construction of a pipeline linking East Siberia to the Pacific Ocean.  

Copyright (c) 2008 Dow Jones & Company, Inc.


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