2019-03-26 11:14 KST  
Global Voices Online - The world is talking. Are you listening?
Qatar, Japan's White Knight
[Analysis] Persian gulf state's plan to double LNG exports comes as godsend for energy-hungry Japan
Hisane Masaki (hmasaki)     Print Article 
Published 2006-12-05 05:52 (KST)   
Qatar is expected to emerge as a country that holds the key to Japan's future energy security as it becomes the country's biggest supplier of liquefied natural gas (LNG) around 2010.

During his recent visit to Tokyo, the Qatari energy and industry minister said the Persian Gulf state plans nearly to double LNG exports to Japan by 2010. This news has come as a godsend for Japan at a time when Indonesia, its current No. 1 supplier of LNG, is considering cutting in half shipments to the country from 2010. At the same time, Japan and Russia remain at odds over the Sakhalin-2 oil-and-gas project in the Russian Far East.

OMNI's New Approach to Citizen Journalism
[Opinion] Democracy's Downfall
Technology Can Save Money, Planet
[Opinion] Iran Defends Peaceful 'Right'
Couchsurfing in Gaza
Assassination in Dubai
UN Votes For Goldstone Report, Again
Italians Seek Kyrgyz President's Financial Advisor
The Biggest Billionaires
Israel, Gaza and International Law
Japan is the world's largest importer of LNG, purchasing 58 million tons from abroad in 2005, of which 25 percent was from Indonesia. Qatar was Japan's fourth-largest LNG supplier in 2005, after Indonesia, Malaysia and Australia, accounting for about 11 percent of Japan's total imports. Qatar, which has the world's third-largest proven gas reserves after Russia and Iran, with 25.78 trillion cubic meters, is set to become the world's top exporter of LNG.

Japan is also the world's second-largest crude-oil importer, after the United States. Japan imports almost all of its oil, about 90 percent of which comes from the Middle East. Qatar is also Japan's fourth-biggest crude-oil supplier, after Saudi Arabia, the United Arab Emirates and Iran.

While Japan's oil imports from Iran have been on the decline this year, its imports from Qatar are on the rise. The Ministry of Economy, Trade and Industry said last Thursday that Japan's October crude-oil imports by refiners and trading houses totaled 18.91 million kiloliters, or 3.84 million barrels a day. By country, Qatar was the third-largest supplier, after Saudi Arabia and the UAE, shipping 2.22 million kiloliters in October, up 5.3 percent from the same month of 2005. Iran slipped into fourth position, shipping 1.91 million kiloliters, down 26 percent from a year earlier.

Qatari Energy and Industry Minister Abdullah bin Hamad al-Attiyah said in Tokyo recently that his country plans to boost its LNG exports to Japan to more than 11 million tons a year in 2010 from the current 6 million tons.

"Now we're listening to our customers [in Japan], we feel they need more LNG. So I think we can increase another 5 million tons in the coming years," said Attiyah, who doubles as Qatar's second deputy premier. "We are very committed to Japan," he said in an interview with the Kyodo news agency. "We would like to be a more reliable energy supplier for Japan."

Attiyah also said Qatar plans to expand global LNG shipments to 35 million tons a year in 2007 from the current 29 million tons, making it the world's biggest LNG producer. He projected that Qatar's global LNG shipments will steadily grow to 77 million tons per year in 2010.

Along with Japan, Attiyah said, Qatar plans to increase LNG exports to South Korea by 2 million tons next year to 7 million tons a year and to India by 2.5 million tons in 2009 to 7.5 million tons. Qatar will also start shipping LNG to Taiwan in 2008.

The comments by the Qatari minister came as a blessing for Japan, which had suffered a spate of setbacks in its energy-security strategy in recent months.

This year Japan adopted a "New National Energy Strategy." The new strategy reflects growing concerns about energy security in the medium and long terms amid high oil prices and the intensifying global rush for oil, gas and other resources, led by China and India. The new strategy calls for strengthened relations with oil- and gas-rich countries through such means as provision of official development assistance and conclusion of free-trade agreements to ensure stable supplies.

The new strategy also calls for, among other things, increasing the ratio of "Hinomaru oil" -- that developed and imported by domestic companies -- from 15 percent to 40 percent of total imports by 2030. But this 40 percent target ("Hinomaru," literally "sun disc," refers to Japan's flag) has become even more difficult to achieve after Japan's recent agreement to give up its controlling interest in the $2 billion development of Iran's massive Azadegan oilfield amid tensions over Tehran's nuclear program. Inpex Holdings Inc, Japan's leading energy developer fully backed by the government, reduced its stake in the southwestern oilfield from 75 percent to 10 percent.

Until recently, there had been growing expectations in Japan of Russia's Far East, a region not only rich in oil and gas reserves but much closer to Japan geographically than the Middle East, which means lower transportation costs. But Russia recently put a damper on such expectations.

In September, the Russian Natural Resources Ministry froze a key environmental permit for the Sakhalin-2 development project off the coast of Sakhalin Island, citing problems with environmental conservation. The project is operated by an international consortium, Sakhalin Energy, in which Royal Dutch Shell PLC has a 55 percent stake. Japanese trading firms Mitsui & Co and Mitsubishi Corp hold shares of 25 percent and 20 percent, respectively.

The Sakhalin-2 project is expected to turn out 9.6 million tons of LNG a year from 2008. Japanese companies, including Tokyo Electric Power Co, Tokyo Gas Co and Chubu Electric Power Co, have agreed to purchase 4.73 million tons per year - equivalent to 8 percent of Japan's LNG imports in fiscal 2005. The initial impact on Japan of a delay in imports from the project might be limited. But if there were a prolonged suspension, the impact could be far-reaching.

In yet another development that casts a cloud over the future of Japan's energy security, Indonesia, Japan's largest LNG supplier, is poised to cut in half its Japan-bound exports of gas when long-term contracts expire in 2010 to boost the availability of natural gas for domestic industries amid decreasing oil and natural-gas production at home.

Reflecting the growing importance Japan attaches to Qatar for its energy security, Tokyo has been barreling ahead in recent months to strengthen relations with Doha. For Qatar, Japan is the biggest trading partner, purchasing about 70 percent of its oil production.

In April, Toshihiro Nikai, who was then the minister of economy, trade and industry, signed an agreement with his Qatari counterpart, Attiyah, to boost relations. During his unusually long nine-day visit to Japan in late November, Attiyah held talks with Foreign Minister Taro Aso and the current Minister of Economy, Trade and Industry Akira Amari during the first Japan-Qatar Joint Economic Committee, a ministerial forum aimed at boosting bilateral economic relations.

At the forum's first meeting, the two countries reaffirmed the importance of oil and natural gas in bilateral economic relations, with Qatar pledging to ensure stable supplies of such resources to Japan. They also agreed to set up working groups on energy and on improvement of the business environment and investment.

Doha "expressed its view that Qatar would keep supplying oil and natural gas including LNG to Japan at an acceptable rate for both sides in a stable manner," the two countries said in a joint statement issued after the meeting. Meanwhile, Tokyo "expressed its view that the importance of Qatar would increase as a supplier of oil and natural gas including LNG, and expressed its intention to take appropriate measures in an expeditious manner to improve and expand the transportation of LNG," the statement said.

In tandem with Tokyo's efforts to strengthen ties with Qatar, the government-affiliated Japan Bank for International Cooperation signed a business-partnership agreement with Qatar Petroleum recently, aimed at developing a more favorable environment for Japanese companies hoping to get involved in energy resource development projects in Qatar. Under the agreement, the JBIC will also extend loans for those projects on condition that Japanese energy developers are allowed to participate in the projects.

Meanwhile, Japan and the six-member Gulf Cooperation Council launched negotiations on concluding a free-trade agreement in September. The two sides hope to conclude the pact by the end of 2007. The GCC groups Saudi Arabia, the UAE, Bahrain, Oman, Qatar and Kuwait. Through the planned pact, Tokyo aims to secure stable energy supplies from the Persian Gulf region.

Japanese firms have been closely involved in Qatar's gas-production increase, and the pace of this has been accelerating in recent months.
Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economy. This is part of an article that originally appeared on Asia Times.
©2006 OhmyNews
Other articles by reporter Hisane Masaki

Add to :  Add to Del.icio.usDel.icio.us |  Add to Digg this Digg  |  Add to reddit reddit |  Add to Y! MyWeb Y! MyWeb

Ronda Hauben
Netizens Question Cause of Cheonan Tragedy
Michael Werbowski
[Opinion] Democracy's Downfall
Michael Solis
Arizona's Immigration Bill and Korea
Yehonathan Tommer
Assassination in Dubai
[ESL/EFL Podcast] Saying No
Seventeenth in a series of English language lessons from Jennifer Lebedev...
  [ESL/EFL] Talking About Change
  [ESL/ EFL Podcast] Personal Finances
  [ESL/EFL] Buying and Selling
How worried are you about the H1N1 influenza virus?
  Very worried
  Somewhat worried
  Not yet
  Not at all
    * Vote to see the result.   
  copyright 1999 - 2019 ohmynews all rights reserved. internews@ohmynews.com Tel:+82-2-733-5505,5595(ext.125) Fax:+82-2-733-5011,5077