Tokyo Gas, the largest natural gas utility provider in Japan, is pushing for the construction of a Japan-Russia gas pipeline to cope with rising liquefied natural gas (LNG) demand, said a key official yesterday.
Feasibility studies were completed and sent to the Japanese government last year but it faced a roadblock due to sanctions on Russia over the conflict in eastern Ukraine.
Shigeru Muraki, executive advisor to Tokyo Gas, says a pipeline needs to be constructed as a precursor to a pipeline network that would reportedly meet as much as 13% of Japan’s LNG needs.
Currently, Malaysia is one of the top suppliers of LNG to Japan.
“Building a pipeline from Russia to Japan would make it easier to build such a network,” he said.
He estimates the pipeline will run 1,500km from Sakhalin Island, Russia to Tokyo, and supply six million tonnes of LNG per year and cost around US$3.7 billion (RM13.32 billion).
“The pricing of US$600 per tonne of LNG is very competitive as it includes shipping costs,” he said.
Malaysia is the third largest supplier of LNG to Japan, the world’s biggest importer of LNG. It supplies 17% of Japan’s LNG, surpassed only by Qatar with 18% and Australia with 21%.
A pipeline deal would almost triple Russia’s current market share of 10% to 27% and eat away from the shares of other exporting nations, including Malaysia.
Shigeru also suggested the pipeline would come in handy should methane hydrate, slated as a next generation fuel source, become ready for domestic use in the next few decades.
Japan has an estimated supply of methane hydrate within its coastal waters to meet its natural gas requirements for a hundred years.
“Why has the US achieved so much success with shale gas?
“Because of their pipeline network,” he said.
Russia and China ratified a gas supply agreement last May that will see Gazprom provide China with 38 billion cu m of natural gas every year for 30 years, from 2018 onwards.
The Kremlin view pipeline projects with China, Japan and Korea as a means to wean Russia from dependence on exports to Europe.
Speaking to delegates at the 18th Asia Oil and Gas Conference here, Shigeru said demand for gas in Japan for energy purposes is slated to increase in tandem with concerns over the safety of nuclear power and high emissions from coal energy production.
While the cost of generating energy from coal may be cheaper than from LNG, increasing pressure on high carbon emissions will prevent expansion in that segment.
Tokyo Gas pushes for RM13.3b Japan-Russia pipeline | The Malaysian Reserve
@LordTyrannus @vostok @senheiser
What can a declining Russia offer Japan apart from oil and gas which Japan pays for (it's not like it's free. lol) and which Japan can get from many other countries anyway. 
