Novatek, Jogmec Eye LNG Co-operation

Russian independent gas producer Novatek's CEO Leonid Mikhelson and his counterpart at Japan Oil, Gas and Metals National Corporation (Jogmec) Tetsuhiro Hosono have agreed to work on opportunities to co-operate in LNG production and trade. Using Novatek's projects in the Yamal and Gydan peninsulas, including the Arctic LNG 2 project, the two will work on developing a regular transport link via the Northern Sea Route for LNG deliveries to the Japanese and Asia-Pacific markets, as well as exploring LNG marketing opportunities in the Asia-Pacific region.

The agreement was signed September 10 as Russian president Vladimir Putin met the Japanese prime minister Shinzo Abe in the Russian Far East port of Vladivostok (see banner photo courtesy of the Kremlin, showing Abe on right).

Mikhelson said: "We welcome the expression of interest from international partners in our LNG projects in the Yamal and Gydan peninsulas.... Japan is one of the most significant global LNG markets, and we expect further expansion of co-operation in this area which will facilitate the development of trade and economic relations between our countries.”

Japan will have to replace or extend a number of LNG contracts with Middle Eastern suppliers in the coming years and its shipping company Mitsui OSK Lines (MOL) is contributing towards the fleet of winterised Arc-7 LNG carriers that will work the Northern Sea Route.

Already nearly all LNG produced by Sakhalin Energy, which is controlled by another Russian firm, state-run Gazprom, is shipped to Japan. That is despite the disputed ownership of the Kuril islands which Russia annexed in 1945, but which were controlled by either it or Japan during the previous two centuries.