Russia and Japan are in talks to build a gas pipeline from Russia to expand gas supplies to the Far Eastern country, Russian gas giant Gazprom said on Thursday.
“The parties have discussed prospects of increase of natural gas supplies from Russia to Japan in terms of higher liquefied natural gas production at the Sakhalin Island and implementation of an LNG plant construction project in Vladivostok,” Gazprom said following a meeting between the company’s export head Alexander Medvedev and Japan’s former Foreign Minister Seiji Maehara.
“The parties also discussed the opportunities for a gas supply project from Russia to Japan through pipeline,” Gazprom said.
The future pipeline could be laid on the seabed, Maehara said earlier on Thursday.
Japan is the world’s fourth largest energy consumer but has no energy resources of its own. The country is the world’s largest consumer of liquefied natural gas.
Japan is also the largest LNG consumer from the Sakhalin-2 project as about 65 percent of produced gas at the deposits is supplied to Japan under 20-year bilateral contracts.
Gazprom and Japan Far East Gas Co., a consortium of Japanese companies, are also implementing a project to build an LNG plant and a gas chemical complex in Vladivostok in Russia’s Far East.
Investment volume in the project might total $7 billion, with a return on investment of seven to eight years, a source close to the project’s participants has said.
The plant, scheduled to be launched in 2016, will produce 10 million tons of LNG from 2017 with seven million tons supplied to Japan and three million tons to South Korea.