Regional LNG: Japan may hike LNG purchases from Russia next year

Japan is considering increasing purchases of Russia's liquefied natural gas (LNG) in 2011 due to Indonesia's plans to reduce exports, Kohei Nakanishi, managing director of state-backed Japan Bank for International Cooperation, said on Thursday as quoted by RIA Novosti.

"We are supplied by Middle East countries and Indonesia. In 2011, Indonesia is going to decrease LNG supplies to the land of the Rising Sun due to the growth of its own economy," Nakanishi told an investment conference. "We are expecting very much from Russian oil and gas suppliers."

The share of Russian LNG supplies to Japan amounts to 4.3 percent of overall imports, while Indonesia's share stands at 20 percent.

Nakanishi said that the most natural and convenient oil and gas source for Japan was Sakhalin.

"The distance between Sakhalin and Japan is one-sixth of the distance between Japan and Middle East countries and nearly half the distance to Indonesia. This means we can offer our clients a better price due to lower transportation costs." (*)