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Tokyo Wants to Build a Natural Gas Pipeline to Russia


A consultant with Japan’s largest gas company said they are interested in building a $3.5 billion pipeline to obtain Russia’s natural gas at half the cost of its LNG

Tokyo Gas, Japan’s largest gas company, would like to build a gas pipeline from Sakhalin, Russia, to central Japan, Shigeru Muraki, a consultant for the company, said at the third annual Russian-Japanese Forum on Cooperation in Business, Technology and Culture in Tokyo. Muraki said the 1,500 long pipeline would cost $3.5 billion, reports Russia Beyond The Headlines.

Sakhalin and Japan Map

According to Muraki, this pipeline would offer an economical alternative to liquefied natural gas (LNG). The Tokyo Gas consultant said that the pipeline gas would cost half as much as the LNG Japan currently imports from Russia, even considering the costs associated with building the pipeline.

Last year, supplies of Russian LNG cost an average of $788 per ton ($579 per 1,000 cubic meters). In comparison, Gazprom’s (ticker: OGZPY) average pipeline supplies to Europe cost $350 to $380 per 1,000 cubic meters.

“In February 2015, while oil prices were declining, the price of liquefied gas already fell to $614 per ton ($451 per 1,000 cubic meter),” says Sergei Agibalov, Deputy Director of the Economic Department at the Institute of Energy and Finance, in Moscow.

Agibalov estimates that, even considering the costs of the pipeline’s construction and Gazprom’s unwillingness to lose revenue, the pipeline gas supplied to Japan would cost less than $400 per 1,000 cubic meters.

Japan is the largest importer of Russian liquefied gas. In 2014, Japan bought 80% of the LNG produced from Gazprom’s Sakhalin-2 LNG project. The

Tokyo Gas

Sakhalin-2 project is located on the far east of Russia, on Sakhalin Island. In 2014, Sakhalin Energy projects produced 10.8 million tons of LNG, according to Gazprom.

A pipeline may not be a possibility

The construction of an underwater pipeline to Japan presents serious risks, says Rustam Tankaev of the Russian Union of Oil and Gas Industrialists. “This is a seismically dangerous region,” he said. “All the studies done on building a pipeline to Japan resulted in negative conclusions.”

The Japanese, however, believe that the project can be done safely, citing the construction of submarine tunnels that connect the Japanese islands.

The hurdles facing the project are more than just seismic though, says Alexei Grivach, Deputy Director of the National Energy Security Foundation. “The Japanese market is built on local segments, which are not connected,” explained Grivach, making gas supplies more difficult.

The project might also seem less attractive to Gazprom, which has greater flexibility through LNG shipments, says Vice President of the Argus Agency Vyacheslav Mischenko. The pipeline would tie Russia to Japan. “The idea [of LNG] is more attractive from a strategic or geopolitical viewpoint,” said Mischenko. “By using ships, Gazprom can change the direction of the supplies, something that cannot be done when there is a pipeline.”

An about-face

The numerous obstacles being thrown up in opposition to a Russia-Japan gas pipeline are a change from last October, when Russia proposed a pipeline from Sakhalin to the northern Japanese island of Hokkaido, reports Reuters.

That pipeline faced its own difficulties, including a dispute over islands taken by Russian forces at the end of World War II that prevented Moscow and Tokyo from signing a formal peace treaty, and Western sanctions against Russia over the conflict in Ukraine.

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10 Comments on "Tokyo Wants to Build a Natural Gas Pipeline to Russia"

  1. BobInget on Fri, 29th May 2015 8:37 am 

    Wa happened ta hydrates on the way to da forum?

  2. aidan harrison on Fri, 29th May 2015 9:03 am 

    Weird headline? Ah, I see….it’s FROM Russia!

  3. GregT on Fri, 29th May 2015 10:46 am 

    Actually aidan, the article comes from, a group of business consultants based in Denver Colorado.

  4. hiruitnguyse on Fri, 29th May 2015 12:18 pm 

    Everyone wanting to get a piece of Putins Pecker these days.

  5. dissident on Fri, 29th May 2015 4:49 pm 

    Hydrate energy is based on the extraction technology of the future and always shall be.

  6. Makati1 on Fri, 29th May 2015 6:26 pm 

    Eventually, the World Island will dominate the Americas. It has everything necessary for existence on one land base. No ships required.

  7. Ted Wilson on Fri, 29th May 2015 10:03 pm 

    Its a good idea. Instead of liquifying the gas, transporting in ships and then regasifying it, its better to send as gas thru pipelines and its lot more efficient.

    Japan is still the World’s #2 consumer of Oil for Power generation. This is one area where Natgas can replace the expensive Oil.

    Anywhere there is a pipeline, there will be someone talking about some dispute. There is no dispute, just build the pipeline. This is the only way Russia can compensate for the decline in Oil prices while Japan can lower their Oil import Bill.

    Win win for both the countries.

  8. Boat on Sat, 30th May 2015 5:11 am 

    Go Japan.

  9. Baptised on Sat, 30th May 2015 11:46 am 

    When are US citizens going to realize that Mass Media is a total lye about Japan. Yes they like our money, yes the paid politicians really like our money. But the real homebody Japanese hate the USA. Sure they will let us talk war about their enemies. But let real war break out and watch how many help, the ones that nuked them, after they were already completely defeated.

  10. Kenz300 on Sun, 31st May 2015 8:19 am 

    Japan needs to concentrate their efforts on wind, solar and geothermal energy options. They can develop those WITHIN their country and rely less on others.

    Every country and economy needs to develop a plan to become more energy independent. This will help them become more economically independent at the same time.

    It is time to break up the power supplier monopolies in Japan and allow more competition.

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