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The Japanese insist on gas pipeline construction from Sakhalin to Hokkaido
by Staff Writers
Moscow (Voice of Russia) Oct 02, 2012

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The Japanese have once again urged Russia to start the construction of a gas pipeline between the two states. Japan's JPDO Corporation, one of Gazprom's partners, says that laying a gas pipeline from southern Sakhalin to Hokkaido is possible and economically substantiated, while Gazprom earlier said that the construction of a gas pipeline across the bed of the Soya Strait is too expensive and non-expedient.

The head of the JPDO Corporation Hideo Agawa says that the construction of the gas pipeline between Sakhalin and Hokkaido may cost from 7 to 9 billion dollars.

Those in Japan have already calculated that a gas pipeline with the capacity of up to 20 billion cubic metres of gas annually may stretch for 1,500 kilometres. Russia has not given an official response yet but earlier Gazprom Head Alexei Miller said that laying such a gas pipeline is inexpedient.

Gazprom is currently supplying liquefied natural gas (LNG) to Japan, and should the gas pipeline be built, it will not be beneficial for the JPDO holding to pump fuel through it. An analyst with the Troika Dialog Company Valeriya Nesterova has a similar opinion.

"Japan is the world's largest NLG importer, and Japan pays for it 1.5 times more as compared with the prices in Europe. Therefore, Gazprom is interested in an increase of gas supplies to Japan. And the fact that it would be more beneficial for Russia to broaden the Sakhalin-2 capacities is quite another matter.

Equally beneficial for Russia would be to export LNG gas because this provides for greater flexibility in sales and besides, improves marketing potential and negotiating positions in the sale of LNG gas."

Gazprom says that this project is too expensive - that is why it would be no good to lay a gas pipeline across the bed of the Soya Strait.

Taking into account the high seismicity of that region, it would be necessary to use high-tech machinery there, which will inevitably lead to the gas pipeline's rising in price. But even big investments in this project do not guarantee that the gas pipeline will not be damaged in an earthquake.

Meanwhile, experts believe that a statement made by Gazprom's Japanese partner on the non-expediency of construction is not accidental and that probably Japan offered Russia new terms for the realization of this project, an analyst with the Finam Management Company, Dmitry Baranov, said.

One of the new terms which Japan offered to Gazprom concerns the financing of this project. JPDO unequivocally hinted that for the construction of this gas pipeline, structures affiliated with the Japanese government may offer easy loans.

Source: Voice of Russia


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