• Bloomberg


Diet members are renewing the push for a ¥600 billion natural gas pipeline from Russia, which last week signed a supply deal with China, in a bid to cut energy costs after the 2011 nuclear disaster in Fukushima.

A group of 33 lawmakers is backing the 1,350-km pipeline between Russia’s Sakhalin Island and Ibaraki Prefecture, Naokazu Takemoto, the secretary general of the group, said in an interview last week. He plans to propose the project to Prime Minister Shinzo Abe as early as June so it’s on the agenda when Russian President Vladimir Putin visits in autumn, he added.

The shutdown of nuclear reactors after the Fukushima crisis has spurred renewed interest in the Russia-Japan pipeline link, which has been discussed for more than a decade, Takemoto said.

The effort also highlights Russia’s expanding role as a energy supplier to Asia after the country signed a $400 billion deal last week to sell China 38 billion cubic meters of gas annually for 30 years.

Japan spent a record ¥7 trillion last year on liquefied natural gas imports — more than double the cost three years ago, the Finance Ministry said. Japan could lower its energy bill by getting gas directly by pipeline rather than more expensive LNG, which is shipped by tankers, Takemoto said.

“Building an LNG plant requires a lot of money and makes the per-unit cost of gas very expensive,” said Takemoto, a member of the Lower House from the ruling Liberal Democratic Party. “Japan would be better off” buying gas via pipeline, he said.

The proposed Russia-Japan pipeline is designed to transport as much as 20 billion cubic meters of natural gas annually, according to proposals by the group, consisting of lawmakers from the ruling LDP coalition. That’s equivalent to about 15 million metric tons of LNG, or 17 percent of Japan’s imports.

All of Japan’s 48 reactors are shut for safety checks after the magnitude-9.0 quake and ensuing tsunami in March 2011 caused a triple meltdown at Tokyo Electric Power Co.’s Fukushima No. 1 plant, shaking public confidence in nuclear energy.

Power companies have applied for the Nuclear Regulation Authority’s safety review of 18 reactors.

About half of Japan’s reactors may never be restarted because of the nation’s tougher safety standards, Yuji Nishiyama, a Tokyo-based analyst with JPMorgan Securities Japan Co., said in a recent interview.

That means the utilities would have to keep importing a large amount of natural gas to fill the gap left by the shutdown, he said.

Japan, the world’s biggest LNG importer, bought 87.49 million metric tons of the fuel in 2013, according to Finance Ministry data. Russia accounted for 9.8 percent of the country’s gas and was the fourth-biggest supplier after Australia, Qatar and Malaysia.

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