METI chief urges Gazprom to keep LNG plant's spigot open, reasonable

by Kazuaki Nagata

Staff Writer

Trade minister Toshimitsu Motegi on Wednesday called on the president of Russia-owned Gazprom to provide Japan with liquefied natural gas from its plant to be built near Vladivostok at a “reasonable price” and in a “timely manner” after it starts up.

In a meeting at the Ministry of Economy, Trade and Industry, Alexey Miller, who heads the world’s largest gas firm, said construction of the LNG plant, slated to start operations in 2018, is proceeding as planned, according to a METI official who attended the meeting.

“Japan is a prospect market for the Vladivostok LNG project,” Miller was quoted as saying by the official.

Motegi meanwhile detailed Japan’s energy and economic situation, in which the country has been spending trillions of yen for LNG to cover idled reactors after the meltdowns at the Fukushima No. 1 nuclear plant. About 10 percent of Japan’s LNG imports come from Russia.

Last September, the industry ministry and Russian government-owned Gazprom signed a memorandum that said the two sides will cooperate on the Vladivostok LNG project. Miller told Motegi that Gazprom has made an investment decision on the project, indicating the Russian firm is firmly committed.

Motegi also told Miller that his Japan visit was well-timed, as Prime Minister Shinzo Abe is scheduled to go to Russia at the end of the month.

Earlier this week, the Russian gas firm and METI’s Agency for Natural Resources and Energy held a meeting in Fukui Prefecture, reportedly talking about how they can coordinate over the Vladivostok project and about Japan’s concerns over the recent rises in the costs of imported LNG.

Fukui has 13 commercial nuclear reactors, which have played an important role for their local economies. But because the Fukushima crisis has dimmed the outlook for restarting nuclear plants, the prefecture looks to stimulate its economy via other sources of energy, including LNG, hoping to bring in an LNG plant.

Japan’s dependency on LNG has rapidly increased due to the nuclear disaster. Because utilities have been unable to use their reactors, they are using more LNG for thermal power generation.

The government said domestic demand for LNG soared to 90 million tons in fiscal 2012, up from 70 million tons in fiscal 2010, heavily contributing to the trade deficit Japan posted in calender 2011 — the first in 31 years.