Japan’s latest move to join hands with Russia in building a liquefied natural gas plant in the Russian Far Eastern port of Vladivostok is aimed at ensuring a stable supply of LNG from that country.
A planned agreement between Japan and Russia to carry out such a joint project is greatly significant in that the deal would enable this country to secure a multitude of LNG suppliers, instead of its current heavy reliance on the Asian and Oceanian regions for LNG supplies. The move would shore up the nation’s energy security, according to observers.
In the years ahead, competition is expected to intensify among nations to secure stable LNG supplies, reflecting greater worldwide LNG demand in recent years. LNG, when burned as a source of energy, emits a smaller amount of carbon dioxide than petroleum and other fuels, and could help in the fight against global warming.
Domestic corporations have made progress switching from using fuel oil to LNG, while a number of LNG-powered thermal power stations have been built in recent years.
The increase in LNG demand has been noticeable not only among industrial powers but newly emerging economies. In 2035, according to one estimate, global LNG demand is expected to see a 2.8-fold increase over 2008 levels.
In fiscal 2009, Indonesia, Malaysia and Australia accounted for a combined 57 percent of Japan’s LNG supplies, with Indonesia’s share nearing a predominant 20 percent. However, Indonesia is reducing its LNG supply to Japan amid a sharp rise in Jakarta’s own domestic demand for the eco-friendly gas.
Russia, a nation that boasts the world’s largest LNG deposits, could replace Indonesia as a major supplier to Japan, according to observers.
The envisaged LNG deal between Japan and Russia comes against the backdrop of a Russian plan to use pipelines to supply natural gas from eastern Siberia to China and other neighboring countries. The agreement means the list of nations buying Russian gas would be expanded to include Japan.
In fiscal 2009, Russia accounted for a modest 6.5 percent of Japan’s LNG imports. But the planned agreement likely would push the volume above 10 percent.