2022-07-05

Is Russia angry with Japan? Japan is a little nervous because of its “heavy workload”

By yqqlm yqqlm

July 5 (Guan Na) – Russian President Vladimir Putin recently ordered to adjust the “Sakhalin 2” energy cooperation development project between Russia and Japan, which caused concern in Japanese public opinion. Japanese media believe that this is Russia’s counter measure against Japan, which will put Japan in a dilemma.

How will Japan, which closely follows the pace of us and Western sanctions against Russia, choose to continue to maintain its “unity” or safeguard its own interests?

Russia is “angry” with Japan, and Japan is unprecedentedly nervous

On June 30 local time, Russian President Vladimir Putin signed a presidential decree announcing that due to the impact of Western sanctions, Russia will set up a new company to take full charge of the operation of the energy cooperative development project “Sakhalin 2”. Gazprom will continue to retain its original shares, and other foreign investors need to apply for retaining shares within one month, and the Russian government will decide whether to approve it.

Is Russia angry with Japan? Japan is a little nervous because of its “heavy workload”

On October 29, 2021 local time, at prigorodnoye port in Russia, an oil tanker loaded liquefied natural gas from the “Sakhalin 2” project.

Statistics show that Mitsui and Mitsubishi hold 12.5% and 10% shares respectively. Foreign media generally believe that the two Japanese enterprises may be forced to withdraw. After the news that Putin signed the new decree came out, the shares of Mitsui and Mitsubishi fell by more than 5%.

How important is Sakhalin 2 to Japan?

“Sakhalin 2” project is located on the continental shelf of Sakhalin Island in the Far East of Russia, mainly exploiting oil and natural gas. The annual output of liquefied natural gas (LNG) of the project is 10million tons, of which about 6million tons are exported to Japan. According to the Ministry of economy, industry and trade of Japan, about 9% of the LNG imported by the country in 2021 came from Russia, almost all of which came from the “Sakhalin 2” project. In addition, the LNG of the project accounts for about 3% of Japan’s total power generation.

As for the Russian presidential decree, Japanese politicians and business circles are constantly nervous. Government officials said warily, “we must confirm Russia’s position and deal with it with unprecedented tension”. Japanese companies are worried that supply will be affected.

At the same time, Japanese Prime Minister Fumio Kishida announced that the Russian move would not lead to an immediate shutdown of natural gas supply. He also said that while paying attention to its impact, he would consider negotiating with relevant enterprises on how to deal with it. Keiichi Morida, the Minister of economy and industry, said that he had asked the United States and Australia about the possibility of alternative supply.

However, Japanese media pointed out that when Europe, which is heavily dependent on Russia for natural gas, began to “break away from Russia”, the world began a “battle for liquefied natural gas”. On the basis of insufficient supply, the current spot price has soared.

On the other hand, since June, Japan has experienced rare high-temperature weather, which has exacerbated the tension in power supply. There are concerns that if the Sakhalin 2 project is lost, the problem of power supply instability in Japan will become more serious. Japan’s already high natural gas and electricity prices will be further pushed up, which will undoubtedly add another “fire” to Japan, which is suffering from high temperatures.

What choice will Japan make when it is in a dilemma?

Japanese media believe that the Russian move is to “retaliate” against Japan. The analysis pointed out that the Russian move put Japan in a dilemma. Since the outbreak of the conflict between Russia and Ukraine, has Japan, which has followed suit with the United States and the West on the issue of sanctions against Russia, continued to maintain the “United Front” or safeguard its own interests?

Is Russia angry with Japan? Japan is a little nervous because of its “heavy workload”(1)

On June 26, 2022 local time, Japanese Prime Minister Fumio Kishida arrived in Germany to attend the G7 summit.

Russia said that the new decree was intended to protect Russia’s national interests from the “unfriendly acts” of the United States and other western countries. Kyodo news agency said that since Japan also joined the sanctions against Russia, this may be a counter measure of Russia. Yomiuri Shimbun bluntly said that the presidential decree was “revenge” against Japan. Russia’s “political experts” network said that Russia’s move was a warning to the whole west.

Nihon Keizai Shimbun analyzed that Japan is facing a dilemma: if Japan seeks to maintain its interests in the “Sakhalin 2” project, it will affect the “unity” of the group of seven (G7); If Japan decides to withdraw from the project, the purchase of liquefied natural gas in Japan will become unstable, and the power crisis will further intensify.

However, in the face of various problems, Japan has not given a clear response. The Deputy Chief Cabinet Secretary, Seiji Kihara, said that “there is no answer at this stage” on how to deal with it in the future.

Peskov, the press secretary of the Russian President, said that Russia saw no reason to stop the LNG transmission of Sakhalin 2. He also said that the future prospects of other projects or investments need to depend on specific circumstances.

It can also be seen from Japan’s recent statement that it does not want to give up “Sakhalin 2”.

Fumio Kishida recently said that the liquefied natural gas provided by Sakhalin 2 is crucial to ensuring Japan’s energy security. Makuhara also said, “from the perspective of power and natural gas supply, Sakhalin 2 is still an important project for Japan, and the Japanese government and enterprises will act together to maintain the stable supply of liquefied natural gas.”

Tass interpreted this statement as that Japan intends to continue to safeguard its interests in the project.

In the face of high temperature and heat waves, lack of electricity, soaring prices, Senate elections… This summer’s multiple “baking tests” are making Japan overwhelmed. How will Japan’s suddenly shaken energy security be rebuilt? Japan seems to have not found the best answer. (end)