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10.05.2017

Russia - Japan: convergence economy

A series of conversations and talks between Russian President Vladimir Putin and the leaders of the United States, Germany and Turkey, to a certain extent, took the Russian-Japanese high-level talks to a shade. Meanwhile, Moscow's and Tokyo's attempts to bring bilateral relations out of years of stagnation are important from the point of view of building a new effective model of relations between countries in the absence of a full-fledged interstate agreement between them. First, it is a potentially explosive region of East Asia with a close intertwining of mutual territorial claims, nuclear ambitions and complex interrelationships of the states located here. Secondly, Russia and Japan are trying to build a fundamentally new model of interaction with regard to territories whose status is disputed by one of the parties.

Finally, Russian-Japanese cooperation is an important component of Russia's international energy strategy. It is no coincidence that the talks between the leaders of Russia and Japan in Moscow took place against the backdrop of the start of work in the construction of the Turkish Stream gas pipeline off the Russian coast of the Black Sea. Laying the pipes began the ship Audacia company Allseas, which is a contractor of both threads of the offshore section of the gas pipeline. "The project is implemented strictly according to plan, and by the end of 2019, our Turkish and European consumers will receive a new reliable route for the import of Russian gas," said Alexey Miller, Chairman of the Management Committee of Gazprom.

It was power, as the results of the talks in Moscow by the Japanese delegation led by Japanese Prime Minister Shinzo Abe showed, is capable of becoming a key driver of Russian-Japanese relations. What happens here is advantageously different from the actions of many European consumers of Russian energy resources by sobriety of approaches and concrete economic calculations. As stressed by the Minister of Economy, Trade and Industry Hiroshige Seko, his country will increase investments in the energy complex of Russia and plans to increase purchases of Russian gas. "Traditionally, Japan buys most of the oil and gas in the Middle East. And we are concerned about this dependence, as this route is very unsafe, is associated with geopolitical risks, "the minister stressed. - Japanese companies are already investing quite large amounts in the oil and gas sector of your country. For example, Japanese companies occupy one of the leading positions in projects on Sakhalin. As for the development of the Yamal gas field, Japanese capital is also present there. It is very important for us to ensure a northern route for the delivery of these energy resources from Russia to Japan. This is very important from the point of view of the energy security of our country. Therefore, I believe that investments from Japan will increase, "Hiroshige Seko said and added that Moscow and Tokyo are also studying the possibility of building a joint gas pipeline. It is expected that the Russian-Japanese investment fund currently being created, the founders of which will be the Russian Direct Investment Fund and Japan Bank for International Cooperation (JBIC), may become a source for financing these large-scale projects.

"Today, Russia and Japan have focused their efforts on building a new model of mutually beneficial cooperation, laying down new principles for economic cooperation. Just a couple of years ago, it was difficult to imagine that the business circles of our countries will actively plan the implementation of joint investment projects in the field of information technology, pharmaceuticals, agriculture, urban development, advanced industrial technologies ... ", says Alexei Repik, Chairman of the Russian-Japanese Business Council . And today all this becomes a reality.

The intensification of economic and investment cooperation as a means of improving bilateral political relations is closely monitored both in Japan itself and in other countries. Rapprochement with Russia as an economic partner will help Japan build relations with China, believes Professor Stephen Nagey of the Tokyo International Christian University. It should be noted that in November 2016, the ministers of economy and energy of Russia and Japan agreed on the development of cooperation in a number of projects, including joint oil and gas production in the Russian Far East, as well as interaction in the field of wind power and decontamination of the Fukushima nuclear power plant.

At present, Sakhalin Energy Investment Company Ltd. (Sakhalin Energy) is one of Japan's partners in energy cooperation with Russia, which has accumulated rich experience in joint projects, Sakhalin Energy, the main shareholder of which is PJSC Gazprom. Sakhalin Energy is the operator of the Sakhalin-2 project, aimed at creating a large oil and gas infrastructure in the region for the extraction, transportation and processing of hydrocarbons. The company supplies oil and liquefied natural gas (LNG) produced in the first in Russia LNG plant, which is built by Sakhalin Energy in the south of the island and produces more than 4% of the world's LNG, to the market.

The main buyers of oil and LNG, produced by "Sakhalin Energy" - the Asia-Pacific region. To date, the oil supplied to China, Japan, South Korea, Indonesia, the United States, the Philippines, Taiwan. Participants of the project "Sakhalin-2» are «Gazprom» (50% + 1 share), the British-Dutch by Shell, and also Japan's Mitsui and Mitsubishi. In addition, in "Gazprom" plans - the construction of the third stage of the plant on Sakhalin.

Russian President Vladimir Putin confirmed on the basis of his talks with the Japanese Prime Minister 27 April: "Japanese business participates in the development of oil and gas fields" Sakhalin-1 "," Sakhalin-2 ", in the construction of a liquefied natural gas plant on the Yamal peninsula. They spoke with Prime Minister Abe and the plans for the joint construction of the Sakhalin-Hokkaido gas pipeline, the creation of a marine energy bridge for the supply of electricity from Russia to Japan, and cooperation in the field of renewable and unconventional energy sources. The implementation of these promising projects will help provide Japanese consumers with additional energy resources on the shortest routes and at affordable prices. "

The Japanese companies' approach to cooperation with Russia in the energy sector is in many respects similar to that of German and Austrian business. This was shown by the recently held meeting of Russian President Vladimir Putin with the general director and chairman of the board of the Austrian oil and gas concern OMV Rainer Seele. "I can only confirm: during these 50 years we have always received Russian gas, we have always dealt with an honest partner and intend to intensify this cooperation. And it was a great honor for us to receive an invitation from Gazprom to come to this beautiful country as investors, "Rainer Seele said at the Kremlin meeting. He said that his company intends to establish "joint gas production in Siberia and with this goal to start jointly with Gazprom the construction of an appropriate infrastructure.

Russia's cooperation with other countries in the gas sector has a solid financial and economic basis. This concerns, among other things, the financial and economic performance of Gazprom. The company's net profit in 2016 amounted to 951,6 billion rubles, an increase of 21%. As Gazprom's CEO Alexei Miller stressed during the 4 May meeting with Russian President Vladimir Putin, "since the beginning of 2017, shipments to the European market have increased by 15% compared to the same volume of the previous year. In absolute terms, this is 8,6 billion cubic meters of gas, plus the volume of the previous year. "

However, energy - but one of the most promising models of the withdrawal of Russian-Japanese relations to a new level. No less important is the idea proposed by the Russian side of the joint economic development of the Kuril Islands.

(To be continued)

A source: Strategic Culture Foundation

Author: Peter ISKENDEROV

Tags: Russia, Japan, Economics, International Relations, Research, Gas, Gazprom