METI: Sakhalin-1 vital for Japan's energy security as US sanctions Russian shareholders

Japan's Industry Ministry said on Friday that the country's energy safety is dependent on foreign projects including Russia's Sakhalin-1. This comes after new U.S. Sanctions against Rosneft, a major shareholder along with Japanese partners. Washington sanctioned Rosneft, a Russian oil company, and Lukoil last month as the latest step to get the Kremlin's attention to the Ukraine war. The U.S. has agreed to allow the two companies' operations to end until November 21, 2018.

After Moscow invaded Ukraine in the previous year, Tokyo stopped imports of Russian crude oil in February 2023.

Russian Supplies

Partly offset Japan's more 90% reliance on Middle East crude oil. The Ministry of Economy, Trade and Industry (METI) will continue to recognize the importance of Sakhalin-1 and will take necessary measures to make sure that Japan's security of energy is not negatively affected," METI stated on Friday, in response to a query about the sanctions against Rosneft.

ExxonMobil left Russia in 2022, after it owned a 30% stake Sakhalin-1.

Exxon had sold its stake to Rosneft, ONGC Videsh and the SODECO consortium, which included METI, Marubeni, Itochu and Japan Petroleum Exploration.

Reports earlier Friday stated that Japan, as the second largest LNG importer in the world, will begin buying liquefied gas on a regular monthly basis, rather than only at peak demand times, to protect against supply shocks. Although not directly related, a rise in emergency LNG purchases could help manage supply shocks, such as potential interruptions due to the Sakhalin-2 LNG Project. The U.S. had urged Japan and its allies to cease imports of Russian oil as part of their efforts to pressure Moscow into ending the war in Ukraine. (Reporting and editing by Saad Saeed; Additional reporting by Yuka obayashi)

(source: Reuters)