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Russia reassures Japan on LNG supply
AFP
TOKYO
Petroleumworld.com 02 27 06Russia reassured Japan on Monday that it would still honour contracts to provide Tokyo with natural gas after concerns about Moscow's decision to take state control of a major private energy project.
Japan is almost entirely dependent on imports for its oil and gas needs and is set to be the main market for the giant Sakhalin-2 gas project in eastern Russia, which Russian monopoly Gazprom took majority control of in December.
The Kremlin cited environmental concerns for the intervention but foreign investors widely saw it as a power grab for Sakhalin-2, which was to be the world's largest privately financed energy project.
"The existing LNG (liquefied natural gas) contracts with Japanese firms will definitely be implemented," a Japanese official quoted Russian Energy Minister Viktor Khristenko telling Japanese Foreign Minister Taro Aso in talks here.
The Sakhalin project was run by British-Dutch group Shell in a consortium with Japan's Mitsui and Mitsubishi until December, when the companies ceded majority control to Gazprom after months of pressure.
On a separate energy project, Aso pressed for the quick construction of a 16 billion-dollar oil pipeline to a port facing Japan, the official said.
Tokyo is providing half the cost of the project, whose construction began in April last year, but has threatened to snap off funding if Russia first builds a branch to China.
The Russian minister's trip comes one day before a visit by Russian Prime Minister Mikhail Fradkov.
The premier will hold talks with his Japanese counterpart Shinzo Abe, and the two are expected to discuss a dispute over four Pacific islands, which Russia calls the Southern Kurils and Japan calls the Northern Territories.
Japan maintains a claim to the islands off its northern coast, which Soviet troops seized days after Tokyo surrendered in World War II.
The dispute has prevented the two countries from formally ending the war and has held up economic ties.
AFP 26 0841 GMT 02 07
Copyright© 2007 AFP. All Rights Reserved.
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