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Russia a safe option for energy-starved Japan

Russia a safe option for energy-starved Japan
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First Published: Fri, Mar 02 2007. 12 34 AM IST
Updated: Fri, Mar 02 2007. 12 34 AM IST
Tokyo: Despite rocky political relations, Japan needs Russia for gas and oil imports as the energy-hungry Asian power tries to ease its dependence on the volatile Middle East, analysts say.
Russian Prime Minister Mikhail Fradkov, on a visit to Tokyo that wrapped up late 28 February, pledged his country would be a “stable” partner.
His visit came after the Kremlin unnerved Japanese and Western investors by taking majority control of the massive Sakhalin-2 gas project, in which two Japanese companies are shareholders.
“Of course you have to be cautious with Russia, but compared with Iran, Russia is far safer as an energy supplier,” said Koji Nakatsu, a professor at Osaka University of Commerce who wrote a book on the Kremlin’s energy policy.
Japan signed a $2 billion deal in 2004 to develop Iran’s largest onshore oil field at Azadegan, irritating its close ally the US.
But Tokyo slashed its stake from 75 to 10% last year as the Iranian nuclear crisis intensified and sanctions loomed on Tehran.
Asia’s largest economy imports nearly all of its oil from the Middle East and has long sought to diversify. Last week Japan signed a 15-year, $3.5 billion oil deal with Venezuela.Japan has increasingly turned to liquefied natural gas (LNG), of which it is by far the world’s biggest importer.
“Securing access to Russian gas is important if you think of a coming era when LNG replaces oil as fuel energy,” Nakatsu said.The Russian premier on his visit sought to focus on trade rather than a lingering territorial dispute.
The two countries have never signed a peace treaty formally ending World War II due to Japan’s claims to four islands off its coast seized by Soviet troops in 1945.
“Tokyo cannot avoid building relations with Moscow, as it is a neighbour and a resource-rich country,” said Koji Inomata, a researcher at the Japan Institute of International Affairs.
But pundits said Japan was not negotiating only from a position of weakness.
“The reason why the Russian prime minister came with a large delegation is because they need Japan’s technology and money,” said Hiroshi Kimura, professor at Takushoku University in Tokyo.
President Vladimir Putin said in February that Russia must wean itself off its dependency on exporting raw materials and use the country’s wealth of natural resources to develop the economy.
“Russia can’t make LNG without Japan’s technology,” Nakatsu said.Analysts said that Japan could also use its purchasing power to secure Russian oil and gas.
Japan is partly funding a multibillion-dollar Siberian pipeline being built to the Siberian coast and has threatened to snap off funding if Russia first builds a branch first to China.
Russia has faced criticism that it has turned its energy wealth into a political weapon. Russia last year briefly cut off gas to Ukraine, disrupting supply to western Europe, and has threatened to do likewise to Belarus.
But Kunihiko Miyake, a visiting professor of Ritsumeikan University in Kyoto, said Japan was different in the Kremlin’s eyes than former Soviet republics.
“Russia’s relations with Asia and Japan are different from its relations with Ukraine and Belarus,” Miyake said. “It is unlikely that Russia would flex its energy muscle over the territorial disputes with Japan.”
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First Published: Fri, Mar 02 2007. 12 34 AM IST
More Topics: International News | Asia |