Japanese Prime Minister Fumio Kishida's announcement on Thursday that he would not abandon a massive Russian gas project was decided weeks ago when he told top officials in private he wouldn't risk Japan's energy security, three sources said.
Kishida assured his trade and economy minister, Koichi Hagiuda, and other officials during meetings in early March that he would stay in the Sakhalin-2 liquefied natural gas project because leaving threatened the economy, the sources said.
Even as it targets Russian banks and oligarchs with sanctions, Japan has less leeway than some of its allies to cut ties to Russian gas, on which it has become more reliant since shutting down nuclear reactors after the 2011 Fukushima disaster. Kishida's announcement may also represent a victory for the trade ministry's energy policy over foreign ministry diplomacy, and could soothe investors in Japanese trading houses that own stakes in Sakhalin-2 and other projects in Russia.For more than a decade, energy-poor Japan has tapped Russian gas to cut its Middle East oil reliance and to make up for lost nuclear capacity.
Japanese gas and electricity companies use Russian LNG. Hiroshima Gas, from Kishida's hometown, relies on it for half its supply. Overall, LNG accounts for a quarter of Japan's total energy mix and generates 36% of the country's electricity. If Tokyo were to ban Russian gas, Beijing could also step in to buy it, one of the sources said. China has called for an immediate ceasefire in Ukraine but has refused to explicitly condemn the invasion.
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