Gas Agreements: Gazprom, Japan may build LNG plant near Vladivostok

Source: Gazprom

Alexey Miller, Chairman of the Gazprom's Management Committee and Tetsuhiro Hosono, Director General of the Agency for Natural Resources and Energy under the Japanese Ministry of Economy, Trade and Industry signed an Agreement of Cooperation. 

The Agreement envisages preparation of a joint feasibility study on the options for natural gas utilization near Vladivostok as well as for natural gas and gas chemicals transportation from the Vladivostok region and their sales among potential customers in Asia-Pacific countries. 

Among other things, the signed document stipulates that a joint front-end engineering design be undertaken in 2011 on constructing an LNG plant near Vladivostok. The parties will also study the possibility of the pilot project on natural gas compression in Vladivostok for subsequent offshore transportation and organization of gas chemicals production. 

The parties also extended the Framework Agreement of Cooperation for five years. 

Russia-Japan, Supply-Demand 

With its scarce domestic energy resources, Japan is the world's fourth largest energy consumer. The country annually consumes some 80 billion cubic meters of gas. The share of gas in the Japanese energy mix is currently at 14 per cent and it is likely to grow. 100 per cent of consumed gas is imported in the form of LNG, making Japan the world's top LNG importer. 

Gazprom and the Agency for Natural Resources and Energy under the Japanese Ministry of Economy, Trade and Industry signed the five-year Framework Agreement of Cooperation on November 21, 2005. The Agreement sets forth the key areas of bilateral cooperation in the gas sector. A Joint Coordinating Committee (JCC) was established to implement the Agreement. A Joint Working Group was set up within the Committee. 

As part of the Russia's Prime Minister Vladimir Putin working visit to Japan оn May 12, 2009 heads of Gazprom, Agency for Natural Resources and Energy under the Japanese Ministry of Economy, Trade and Industry, Itochu corporation and Japan Petroleum Exploration Company (JAPEX) signed the Memorandum of Understanding to jointly undertake a scoping study on LNG/CNG facilities construction near Vladivostok. The scoping study results were addressed at the fifth JCC meeting in Saint Petersburg in July 2010. 

The Agreement of Cooperation in preparation of a joint feasibility study on the options for natural gas utilization near Vladivostok as well as for natural gas and gas chemicals transportation from the Vladivostok region and their sales among potential customers in Asia-Pacific countries is signed to develop the Memorandum of Understanding with due consideration of the feasibility study results.



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