Russia yesterday opened its first liquefied natural gas (LNG) plant, a project that will greatly increase its role as an energy exporter in the Asia-Pacific region. Japanese Prime Minister Taro Aso and Russian President Dmitry Medvedev attended a ceremony to mark the launch of the plant, located on Sakhalin Island about 150km from Hokkaido.
“This strengthens our position, Russia’s position, as an important player on the global energy market and I will not hide that we are very pleased by this,” Medvedev said at the ceremony.
Aso said Japan’s resolve to start “partnership” with Russia was solid, while also pointing to Tokyo’s wish to resolve a long-standing territorial dispute over four islands near Sakhalin.
“By making progress in the negotiations over the biggest issue that lies between the two nations — the final resolution of the territorial issues — I strongly hope for building of Japan-Russia relations that are befitting of true partners in this region,” Aso said.
Aso’s visit underlines the importance of the project for Japan, which has been seeking to reduce its dependence on Middle Eastern oil and gas. It is also the first trip to Sakhalin by a Japanese prime minister since the days when Japan held the southern part of the island. Hundreds of thousands of Japanese were evacuated from Sakhalin after World War II.
The dispute over the islands, called the southern Kurils by Russia and the Northern Territories by Japan, has prevented Russia and Japan from signing a peace treaty to formally end World War II.
Ironically, the new LNG plant, located outside the port town of Korsakov, stands near the rubble of an old Japanese monument marking the landing of Japanese troops on Sakhalin in 1905.
About 65 percent of the plant’s production will go to Japan with the rest roughly split between South Korea and the US, said Sakhalin Energy, the consortium behind the project. The plant is expected to produce 9.8 million tonnes of LNG per year, or about 5 percent of the world’s total LNG supply, the company said.
Its opening marks the culmination of Sakhalin-2, a US$20 billion oil and gas project that has been led by Russian state-run energy giant Gazprom since a controversial change of ownership in 2007.