Gazprom vows stable LNG supply for Japan

Kyodo

The vice chief of Gazprom, Russia’s state-backed gas monopoly, said Friday that it intends to supply liquefied natural gas from Sakhalin to Japan “in a stable manner over a long period of time.”

Gazprom Deputy Chief Executive Officer Alexander Medvedev also told reporters the company is likely to start exporting LNG to Japan in March.

Medvedev said there is no risk of seaborne transportation being blocked by a third country, as Gazprom’s gas exports via the pipeline through Ukraine have been.

Gazprom’s supply of natural gas to Europe via Ukraine was interrupted for two weeks in January, causing an energy crisis.

Russia and Ukraine traded blame when supplies to the European Union were suspended. Russia accused Ukraine of blocking gas delivery, while Ukraine criticized Russia for using the row to wrest control of Ukraine’s vast pipeline network.

Medvedev said there is no need for concern as Gazprom has concluded long-term supply contracts with Japanese companies.

He said all would-be buyers of LNG will be able to engage in transactions with Gazprom, which he described as “an expert and reliable supplier.”

LNG exports from Sakhalin may shift the focus of Russia’s gas business to Asia. For years, Europe has been the biggest consumer of Russian-tapped gas.

Medvedev hinted that Gazprom could expand LNG production at the Sakhalin facility if demand for Sakhalin-produced LNG grows in the future.

The Sakhalin-2 gas and oil project was built off the island on the basis of massive Japanese investment by trading houses Mitsui & Co. and Mitsubishi Corp., and the Royal Dutch/Shell group.