Japanese companies express interest in Sakhalin-Hokkaido gas pipeline

According to Sakhalin-based media outlets and Japanese media, Japanese companies are willing to invest US$ 5 billion in the construction of a 1400 km gas pipeline running directly from Sakhalin, the Russian island off of the eastern coast, to Ibaraki Prefecture, not far from Tokyo.

It is reported that the project details are being worked through by interested parties, such as gas company Tokyo Gas, oil company Japan Petroleum Exploration (JAPEX) and construction company Nippon Steel & Sumikin Engineering. Preliminary estimates say construction and implementation could take between five and seven years.

Japanese media reported that the companies are prepared to invest up to 400 million yen (US$ 5 billion), to construct the gas pipeline. "This is the first serious intensification by Japanese companies in this direction in the last ten years," a national newspaper said.

Previously, Russian gas major Gazprom has confirmed talks with Japan on the possibility of building a gas pipeline on the Honshu and Hokkaido islands. However, according to Gazprom, both parties agreed that an LNG plant was a higher priority. It is not unlikely that Gazprom will revisit the construction of a pipeline after it implements its LNG projects.

The proposed project involves laying a gas pipeline from Prigorodnoye Port in southern Sakhalin to the island of Hokkaido (Japan’s northernmost island), then later on to the south along Japan's eastern coast through the Aomori, Iwate, Miyagi and Fukushima Prefectures.

With a planned capacity of around 16 - 20 billion m³ of gas, the pipelime is believed to cost 550 - 700 billion yen. Gas from the Sakhalin-3 project and surrounding fields could serve as the resource base for the pipeline. Once the pipeline reaches Aomori, it will be joined up to the existing Aomori-Tokyo district system.

Japan holds the mantle as the largest LNG importer in the world. Following the Fukushima disaster in March 2011, and the deactivation of most nuclear reactors, Japan's demand for hydrocarbon fuel soared.

Edited from various sources by Cecilia Rehn.

Read the article online at: https://www.worldpipelines.com/business-news/09112012/japanese_energy_companies_express_interest_in_sakhalin_to_hokkaido_gas_pipeline/