Japan-Russia to develop new LNG in the Far East

Russia's resource development business Sakhalin 1 crude oil production facility

A new liquefied natural gas (LNG) project begins in Far Eastern Russia. Japanese gov and Itochu have decided to work together with ExxonMobil and others.

• In 2027, production will start at just under 10% of Japan's LNG procurement volume, and the project cost is expected to reach 1 trillion yen. Russia wants to expand its natural gas supply from Europe to Asia. Japan will also strengthen ties with Russia and diversify procurement.
• The main business is a business association consisting of Exxon and Russia's state-run oil company Rosneft, as well as "Sakhalin Oil and Gas Development"
• Sakhalin 1 already produces crude oil but will send gas to mainland Russia via a new pipeline of about 200 kilometers, producing 6.2 million tons of LNG annually
• The original plan was to make connect nearby Sakhalin 2 by Gazprom & Shell but price nego. had not worked out and Rosneft decided to export LNG on its own.

https://www.sakhalin-1.com/en-RU/Company/Who-we-are/About-the-project#consortiumMembers

About the project | Sakhalin-1

Sakhalin I Project

Power of Siberia & other pipeline PJT. connecting Sakhalin O&G PJTs

"Sakhalin Oil and Gas Development": a JV invested by JPN Gov.(Ministry of Economy, Trade, and Industry), ITOCHU, JPEX, and Marubeni.

https://www.japex.co.jp/english/business/ep_o/russia_sakhalin.html

Russia / Sakhalin | JAPEX

Russia is the world's second-largest gas producing country after the United States, yet exporting less than 40% of its domestic production. Many of its PNG export destinations are in Europe while Europe is trying to diversify its import sources due to increasing energy security concerns. Thus Russia is keen to secure new markets in northeast Asia including China and Japan.

• So far Japan's LNG import from Russia accounts for only 8% in 2018. (IMHO, 좀더 경제성이 개선되면 더 늘린다고 하는데 deep-sea or ultra deep-sea drilling 이라서 원가 경쟁력이 마냥 낮기 힘들것이라 추정)
• 2018 LNG 수입 통계를 봐도 호주가 35%, 말레이시아 등 동남아 29%, 중동이 22%로 절대 다수를 점유하고 있음 (IMHO, 이들 계약이 LNG가격이 상당히 높을 때 장기 계약을 체결한 경우가 많은 바, 조건만 맞을 경우 SWITCHING동기는 높을 것임)
• 미국산 천연가스 수입도 3%대로 아직까지 미미한 수준임 - 미일 관계를 고려할 때 이에 대해 개선을 미국에게 요구받을 가능성도 높다고 봄 

Japanese engagements in Russian LNG development projects so far:

• Sakhalin 2 - 미스비시, 미스이, Shell 지분이 축소되소 Gazprom이 최대 지분을 갖게 됨, 러시아 최초 LNG Project, 9.6m Ton LNG capa./year
• Arctic LNG 2 (Design and construction phase as of 2019)

https://www.gazprom.com/projects/sakhalin2/

Sakhalin II

http://www.novatek.ru/en/business/arctic-lng/

Arctic LNG 2