NEWS HEADLINES for Eastern Europe and Russia



Gazprom and Japan Discuss Pipeline
May 2012

Japan agreed to study a plan to lay an underwater pipeline from Russia for gas deliveries, a Japanese lawmaker said Thursday.

Shaken by a nuclear-power plant disaster caused by a nasty tsunami last year, the country has had to rely more on gas to generate electricity.

"We are studying new opportunities for laying the pipeline," Seiji Maehara, a senior member of the ruling Democratic Party of Japan and a former foreign minister, said at a news conference in Moscow, RIA-Novosti reported.

Since the tsunami cast a shadow on Japan's nuclear-power future, the island country has increased its purchases of liquefied Russian gas originating at the Gazprom-controlled Sakhalin offshore fields.

Pipeline gas is generally cheaper than the liquefied commodity that Japan receives by tankers. But pipelines deprive the supplier of flexibility and typically require elaborate long-term contracts.

Maehara, a member of the parliament's committee on fundamental national policies, discussed the pipeline option with Gazprom later on Thursday.

"The sides touched on the possibility of examining the project of pipeline supplies of gas from Russia to Japan," the company said in a statement.

Maehara's counterpart Alexander Medvedev, Gazprom's deputy chief for exports, noted in the statement only that the project has to be commercially viable for both sides.

Maehara, speaking at the news conference, said there was no specific route for the proposed pipeline yet. Earlier studies showed the feasibility of the construction.

The future of the plan depends on how much Japan would have to invest, he said. It also hinges on the country's decision about its nuclear-power industry, he said.

Gazprom recently completed a pipeline that carries gas to Vladivostok from Sakhalin. It could extend a spur across the Sea of Japan to surface in that country.

The gas giant has built up quite a bit of undersea pipeline experience over recent years. In a consortium with Western European partners, it constructed a line to Germany under the Baltic Sea. The company earlier laid a line to Turkey under the Black Sea.

In yet another underwater endeavor, Gazprom has scheduled work to begin later this year on a Black Sea pipeline to Bulgaria.

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