Japanese Firms Ink MOUs with Novatek
Novatek, Gazprom and also Rosneft separately announced several agreements with Japanese energy groups December 16.
They came in the context of a two-day meeting in Tokyo this week between Russian president Vladimir Putin and Japanese prime minister Shinzo Abe.
In one of the deals Japan's Marubeni, not an existing partner in Gazprom-led Sakhalin II, agrees to think about a planned new Novatek LNG venture. The two political leaders however made no progress on the southern Kuril islands, claimed by Japan but occupied in 1945 by Soviet troops.
Gazprom inked two strategic cooperation agreements with Mitsui and Mitsubishi, both already partners in the Sakhalin II LNG export venture, aimed at adding a third LNG train to the existing complex. With Mitsui, Gazprom’s agreement looks to expand cooperation in LNG bunkering, while with Mitsubishi it looks to broaden their partnership to new areas.
Some 70% of the LNG produced Sakhalin II is supplied to Japan, accounting for 10% of Japanese LNG imports, said Mitsubishi's statement.
Japanese PM Shinzo Abe (Photo credit: US embassy, Tokyo)
Gazprom signed a memo of understanding (MOU) with Japan Bank for International Cooperation (JBIC) outlining basic principles of cooperation in securing financing for Gazprom-Japanese projects.
Novatek, which operates Russia’s Yamal LNG development, signed three separate MOUs with Mitsui, Mitsubishi and Marubeni according to which the parties intend to cooperate strategically in implementing LNG projects in Russia, and in supply LNG and other liquid hydrocarbons.
Novatek, Marubeni jointly to consider Arctic LNG 2
The MOU with Marubeni though appears more specific. In Marubeni’s words, the two “will explore opportunities to develop upstream and midstream areas for the Arctic LNG 2 project which Novatek is newly implementing, LNG supply and shipping arrangements, the development of gas related infrastructure projects, and trade in various liquid hydrocarbons.”
Arctic LNG 2 is as yet only on the drawing board --- unlike the $27bn, 16.5mn mt/yr Yamal LNG project from which some production is expected 2017. Novatek has been quoted as having said Arctic LNG 2 would be the same size as Yamal LNG, starting production in 2025, but the LNG market is over-supplied making such investments very uncertain in the medium-term.
Marubeni, Rosneft, and Japan’s Inpex and Jogmec also agreed basic principles on future exploration in a Rosneft block southwest offshore Sakhalin Island in the Russian Far East, including the use of the Japanese seismic vessel Shigen.
Abe was the first foreign leader to hold talks with US President-elect Donald Trump in mid-November, after some of Trump's election rhetoric suggested he might revise US-Japan alliances. Abe described that meeting as "candid" but "warm."
Mark Smedley