business

Huge Russia-China gas deal still leaves door open to Japan

6 Comments
By Osamu Tsukimori and James Topham

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© (c) Copyright Thomson Reuters 2014.

©2019 GPlusMedia Inc.

6 Comments
Login to comment

The speculation that Russia and China's mega gas deal would help Japan in future may actually have some merits in it, and if it works as hoped, that would be really good for Japanese economy and Japanese consumers.

Right now Japan imports about 10% of its LNG from Russia and, the rest of LNG imports from Asian countries such as New Guinea, Australia and Indonesia. However, the prices that Japan pay for its LNG are relatively expensive, which ranges between $13.5 mmBtu to $20.40 mmBtu depends on market conditions. Becuase China will reduce its purchase from current Asian LNG exporters, that alone will alleviate pricing pressure . In addition, Russia may have an incentive, by using gas as a effective weapn, to drive a wadge between the US and Japan. whether or not Russia can succeed on that, it will depend on several factors including time, geopolitics and EU.

Nonetheless, One of good things about LNG, unlike nuclear or coal, is safer and environmentally sounder energy source , so Japan should really go after LNG rather nuclear.

1 ( +1 / -0 )

PRC needs to do alot of construction to do into actually utilizing the natural gas they are going to buy since they still lack the infrastructure. They are still a coal energy society.

As for price of LNG, it's not the cost up front that is expensive, the utility companies fixed it with a high premium to ensure they recieve a certain amount. The real burden is the amount of gas lost during transport and that amount accumulates in a steady pace since you can't stop evaporation of LNG.

2 ( +3 / -1 )

I would not be surprised a deal is announced soon to ship natural gas via undersea pipeline from Sakhalin Island to Hokkaido and subsequently from Hokkaido back to Honshu. This is a consequence of the deal between China and Russia to buy natural gas from new gas fields in eastern Siberia.

2 ( +2 / -0 )

It is to Japan's interest to be closer to Russia. A cooperative and mutually trusting Russia, China and Japan, including SK can counterbalance the US and Europe. It is time that Japan stops being manipulated by the US.

-2 ( +0 / -2 )

@Samurai

PRC needs to do alot of construction to do into actually utilizing the natural gas they are going to buy

In my opinion, PRC used to get the cheaper LNG deals with neighbors because of independent foreign policy. Japan is not independent. Of course! Japan is more advanced in technology. In the market, that factor does not make the competitiveness. Currently Japan is paying to Russia for same quality and quantity of LNG for many times more than PRC. It is because Russia believe that PRC is bigger promising market and it is important for Geo Political interest. Japan is not.

they are going to buy since they still lack the infrastructure.

PRC has been importing LNG with pipe lines from other neighbors before getting the deal with Russia.

The gas is transported through the 739 km Myanmar-China gas pipeline, which is linked to CNPC's 1,727 km network in southwestern China.

From Central Asia, China also imported 1.17 million mt of gas from Turkmenistan in September, a 26.4% year on year increase, the data also showed.

Uzbekistan gas pipeline imports totaled 169,086 mt last month, compared with just 15,244 mt a year earlier.

http://www.platts.com/latest-news/natural-gas/singapore/chinas-first-import-of-myanmar-natural-gas-totals-27547262

The real burden is the amount of gas lost during transport and that amount accumulates in a steady pace since you can't stop evaporation of LNG.

One of the risks of LNG is a rapid phase transition explosion, which occurs when cold LNG comes into contact with water. Now a days, it can minimize the loss with extreme cautions.

The most important infrastructure needed for LNG production and transportation is an LNG plant consisting of one or more LNG trains, each of which is an independent unit for gas liquefaction. Russia and PRC have proximity. Short LNG pipelines for use in moving product from LNG vessels to onshore storage are available. Longer pipelines, which allow vessels to offload LNG at a greater distance from port facilities are under development. This requires pipe in pipe technology due to requirements for keeping the LNG cold.

1 ( +1 / -0 )

So Japanese car Companies should renovate more friendly CNG car engine than today CNG power car.

-1 ( +0 / -1 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites