Japan Eyes Underwater Gas Pipeline From Russia

June 2012 Vol. 239 No. 6

Japan’s national government will study a plan to lay an underwater pipeline from Russia for gas deliveries.

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

The future of the plan depends on how much Japan would have to invest and its decision about nuclear-power. 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.

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