The China-Russia agreement unlocks new gas supplies and could bring down gas prices across Asia, a development that would pay the biggest dividends for Japan, the world’s top buyer of liquefied natural gas, and possibly other big Asian gas buyers such as South Korea and Taiwan according to a lengthy Reuters analysis (Huge Russia-China gas deal still leaves door open to Japan).
A source at one of the biggest Japanese buyers of gas shipped in liquid form has told Reuters said that the new Russian gas should absorb some Chinese pressure on LNG demand in Asia, but others are more cautious with Gavin Thompson, the head of Asia-Pacific gas and power at consultancy Wood Mackenzie, saying: “The Russian gas will be coming into the northeast of China, into a market that was never going to be served by LNG in the first place.”
Japan buys about a third of global LNG shipments and spent a record 7.06 trillion yen ($70 billion) last year – mostly for electricity generation to replace idled nuclear reactors following the Fukushima disaster in 2011. Japan’s utilities pay the world’s highest prices.
In addition, imports of Russian LNG into Japan rose 3.1% last year to 8.57 million tonnes, or 9.8% of total imports. The Russia-Chinese deal has also revived talk of a pipeline from Russia to Japan and it could “also spur further development of gas fields in Siberia that could be a source of LNG for Japan” according to Takashi Hayasaki, the general manager of the Japan Petroleum Development Association.
To read the whole article, Huge Russia-China gas deal still leaves door open to Japan, go to the website of Reuters. In addition, check out: The BIG Loser in the Russia-China Gas Deal? Australia (SMH)
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