FACTBOX – Key issues in Japan-Russia relations

… OIL PIPELINE

Russia is building an oil pipeline that will eventually link fields in eastern Siberia to the energy-hungry markets of the Far East and the Pacific basin.

There is competition between Japan and China over which will receive the lion’s share of crude from the pipeline.


SAKHALIN-1

Russian gas export monopoly Gazprom has said it wants to sign a deal to buy the entire annual gas output from the Sakhalin-1 project off Russia’s Pacific coast.

The field is run by U.S. oil major Exxon Mobil, Russian state oil firm Rosneft, Japan’s Itochu and Marubeni and India’s ONGC.

The firms that run the field had invested more than $12 billion to launch oil production in 2006 which reached a peak oil output of 250,000 barrels per day last year.

The companies had signed a deal to supply China with 8 bcm of gas a year and had hoped to start supplies from next decade. But the plan ran into trouble after Gazprom said gas should be used to supply Russian Pacific regions.

Some observers suspect gas would in fact be redirected to the liquefaction plant of Sakhalin-2 for export to Asia.

Reuters