Japan trade minister Koichi Hagiuda told news agency Nikkei Asia on Friday that it will not withdraw from the oil and liquefied natural gas development projects in Russia. Several Japanese energy companies have invested in Sakhalin-1, Sakhalin-2 and Arctic LNG 2 (ARC 2) projects and the nation deems these projects essential to Japan’s energy requirements.
“We have interest in them and have secured long-term claimants. In the current situation of sudden energy price increases, we can procure energy at prices cheaper than the market price. This is extremely important for energy security,” Hagiuda was quoted as saying by news agency Nikkei Asia.
Japanese companies METI, Itochu, Japan Petroleum Exploration Company, Marubeni and Inpex have funded the Sakhalin-1 project. Mitsui and Mitsubishi among others fund the Sakhalin-2 project while Mitsui and Japan Oil, Gas and Metals National Corporation fund the ARC 2 project.
Japan’s trade minister said that Japan will not withdraw from the Arctic LNG project.
The announcement is likely to create concerns for the Biden administration whose sanctions on Russia specifically target its energy exports. The US president Joe Biden himself questioned India’s commitment to peace in Ukraine and said he felt that among Quad partners India’s commitment was ‘shaky’. Speculations will arise if the Biden administration harbours similar sentiments for the Fumio Kishida-led government as it also faces inflation and the war on Ukraine disturbs Japanese markets and businesses. India’s commitment was questioned because India plans to buy Russian crude at a discounted rate at a time when energy crisis grapples the world due to situation in Ukraine.
Russian president Vladimir Putin signed a presidential decree requiring companies from countries the Russian Federation deems unfriendly, which includes Japan, to in rubles when purchasing Russian natural gas. Hagiuda said that the impact on Japan will not be imminent but the situation is being monitored.
Meanwhile, speaking to Nikkei Asia, former Ukrainian prime minister Arseniy Yatsenyuk urged Japan to impose an embargo on Russian oil and gas and urged companies to stop their investments in the Sakhalin-2 project. He said that getting rid of Russian energy dependence is in the national interest of Japan. Yatsenyuk also blamed Beijing for choosing the ‘wrong side’ as Russia and China come closer. Ukraine president Volodymyr Zelensky last month addressed the Japanese parliament and thanked the nation for housing refugees from Ukraine.
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