Japanese liquefied natural gas importers will face the expiration of a number of long-term LNG supply contracts in the coming years, but will not stop importing raw materials. In particular, Tokyo is interested in gas supplies through the Arctic LNG-2 project. This was announced on Tuesday, May 16, in an interview with Izvestia by Kirill Rodionov, an expert at the Institute for the Development of Technologies in the Fuel and Energy Complex (IRTTEK).
He pointed out that according to S&P Global Platts, in 2020 the volume of long-term contracts for the supply of LNG in force at that time was 99 million tons per year. By 2030, this volume will decrease by a third – to 65 million tons per year.
“That is why Japan last year did not refuse to import LNG from Russia, the basis of which is supplies from the plant in the Sakhalin port of Prigorodnoye, whose shareholders include Japanese Mitsui and Mitsubishi. For the same reason, Japan will be interested in the supply of raw materials from the Arctic LNG-2 project, the total capacity of which will be 19.6 million tons per year,” the expert noted.
Rodionov also drew attention to the fact that the Japanese electric power industry is highly dependent on the stability of gas supplies.
“In 2022, the share of gas in the country accounted for 34% of electricity generation. Before the accident at the Fukushima-1 nuclear power plant, nuclear power plants (NPPs) played an important role for Japan: in 2010, their share in the generation structure was 25.7%, but in 2022 this figure reached only 5.4%,” — he explained.
The expert added that at the beginning of 2023, only 17 of the 60 nuclear power units built between 1963 and 2009 were operating in Japan. Despite the fact that the Japanese government allowed the construction of new generation reactors to replace existing capacities and extended the life limit of nuclear power plants to 60 years, the share of nuclear generation, according to Rodionov, will not return to 2010 values for a long time.
“Therefore, Japan will be the least interested in any restrictions on the supply of LNG from Russia,” he concluded.
Earlier that day, Consul General in Sapporo Sergei Marin, in an interview with RIA Novosti, said that Japan could increase LNG supplies from Russia by two million tons by 2026 through the Arctic LNG-2 project.
On March 27, Japanese Prime Minister Fumio Kishida, speaking in parliament, said that Tokyo would continue to participate in energy projects on Sakhalin, as they are important for ensuring energy security. He expressed the opinion that the demand for LNG will grow.
Leading analyst of the National Energy Security Fund, expert of the Financial University under the Government of the Russian Federation Igor Yushkov expressed the opinion in an interview with Izvestia that Japanese companies do not want to leave projects on Sakhalin so as not to lose the income they receive. He also noted that these projects are also very beneficial in terms of logistics.
On November 22, 2022, it became known that the general license of the US Treasury Department allowed the transportation of Russian oil to Japan as part of the Sakhalin-2 project.