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Putin Eyes Japan as New Gas Customer

Moscow recently proposed the construction of a natural gas pipeline that would connect eastern fields with Japan, according to a report from a Japanese newspaper. Reuters reports:

The plan to build a pipeline between Sakhalin and the northern Japanese island of Hokkaido was presented to Japan last month by Russia, the Nikkei reported, citing diplomatic sources it did not identify. […]

Moscow, which is heavily dependent on taxes from oil and gas sales to western Europe, has been trying to shift focus to Asian countries including Japan and China as potential customers for its vast reserves in eastern Siberia.

It has been offering lower priced gas to Japan, which buys about a third of world shipments of liquefied natural gas (LNG), a supercooled form of the fuel, the Nikkei said.

Russia and Japan never formally signed a peace treaty after World War II, and a territorial dispute over the Kuril Islands could complicate any potential gas deal. But Moscow showed earlier this year that it is willing to set aside concerns to secure gas deals in Asia, after it signed a $400 billion contract with China after more than a decade of pricing disputes.

Much is made about Europe’s heavy dependence on Russian gas, and rightfully so: relying on one source, especially one like Russia, for one third of your natural gas can lead to some very shaky energy security. But the flip side of that coin is Russia’s dependence on securing a reliable buyer for its prodigious hydrocarbon reserves. The Kremlin’s budget relies heavily on the sales of oil and gas, and disruptions to sales to Europe hurts both sides.

In light of this fact, it shouldn’t surprise us that we’re seeing another sign of Putin looking east to hedge his bets.

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  • Sibir_RUS

    Russia is the largest country on this planet with a total area of 17,124,442 km2 (6,623,273 sq mi)
    In Russia concentrated are big reserves of oil, gas and fresh water. We have the most modern and efficient strategic nuclear forces. My country has the right of veto in the United Nations as the country of the winner of the World War II. Our nuclear triad is a weapon of deterrence.
    «Russia is prepared to assume its share of responsibility for the current global state of affairs. We have no great-power ambitions, nor do we suffer from inferiority complex. We are committed to finding solutions to existing problems based on the rule of international law, balance of interests, and common sense. To this end, we actively participate in various collective mechanisms for managing international relations at the global and regional levels, including, first of all, the UN, but also G20, CIS, SCO, BRICS and others. This network diplomacy reflects the emergence of a new polycentric world order which would be more equitable, democratic and sustainable.»

    • Nathaniel Greene

      Does the Kremlin actually believe that people will buy this nonsense? How much are they paying you, comrade?

      • Sibir_RUS

        S.V.Lavrov:”We do not want others to obey us; we want them to listen to us and to take our opinions into account”
        In other words, it is not necessary, that you liked my comments (no one pays me for them)

        • FriendlyGoat

          You are more convincing than your current national leader.

  • Andrew Allison

    Given the natural gas blackmail on display in Europe, and the Kuril Island and other disputes Japan would be crazy to expose itself to the same threat. Instead, it should be striving for as much energy independence as possible, starting by recommissioning it’s nuclear power stations.

  • Curious Mayhem

    Japan would be crazy to expose itself to dependence on Russia. What’s going on here, as elsewhere, is that Putin is desperate, as oil and gas prices collapse. They’re going to fall further in the next few years, and Putin’s days may be numbered.

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