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METI Chief Requests Gazprom to Supply LNG at Reasonable Prices
=Minister Motegi held a talk with President Miller
Toshimitsu Motegi, Ministry of Economy, Trade and Industry (METI) requested Russian government-owned gas firm Gazprom to provide Japan with LNG at reasonable prices in the meeting held at the METI on the evening of April 17th. Explaining about outline and progress of the LNG production project which the company has proceeded with near Vladivostok, Alexey Miller, president of Gazprom, presented his perspective that this will be a significant project for both Russia and Japan and showed his wishes to move the project forward steadily, taking into consideration the request by the minister.

This February, Gazprom disclosed that it made final investment decision (FID) to construct 15 million ton-per year LNG production plant, consisting of three trains, each having capacity of 5 million tpy, at the site in the vicinity of Vladivostok. President Miller also explained about that in the meeting on April 17th.

However, Gazprom has not yet fixed its sales destination for LNG from Vladivostok. Generally, a decision to finance a LNG project is made after some sales and purchase agreements (SPA) are reached.

At the press briefing held after the meeting, the Agency for Natural Resources and Energy said, " We have recognized the FID made by Gazprom might be slightly different from ordinary one," suggesting that there are still many hurdles to overcome before the project is realized.

Gazprom is conducting commercial negotiations with Japanese LNG buyers. Although President Miller expressed his view to Minister Motegi that Japan's cooperation will be indispensable to materialize Vladivostock LNG project, it is not clear how far Gazprom as a seller will comply with Japan's request for reduction in prices.

The agency acknowledged that the most important issue for Japan is to buy LNG at lowest possible prices as long as there is no problem for specification of the LNG as well as the project ability to get things done. Gazprom has an experience to complete Sakhalin II LNG Project and is considered satisfactory as the operator.

Based on the acknowledgement, the agency showed its expectation that Japan will be able to procure LNG from Vladivostok at reasonable prices in the future negotiations by weighing the prices against competitive prices of LNG produced in the North American gas fields because sales of LNG from Vladivostok are thought to be adequately profitable even after the sales prices are cut.
last modified : Thu 25 Apr, 2013 [11:16]
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