Russia to start 1st LNG production next week for export to Japan+

MOSCOW, Feb. 13 Kyodo - Russia will start its first-ever liquefied natural gas production on the island
of Sakhalin in its Far East next Wednesday in a bid to start LNG exports to
Japan in late March.

Russian President Dmitry Medvedev and Japanese Prime Minister Taro Aso are
scheduled to attend a ceremony the same day for launching the LNG plant in
Prigorodnoye, southern Sakhalin, which is widely expected to open a new chapter
in Japan-Russia energy cooperation.
Under the Sakhalin-2 oil and natural gas development project in which Japanese
trading houses Mitsui & Co. and Mitsubishi Corp. are taking part, natural gas
will be sent through a pipeline to the Prigorodnoye gas liquefaction plant for
annual LNG production of some 9.6 million tons.
Russia, boasting the world's largest natural gas deposits and production, has
so far exported gas via pipelines to Europe.
Some 60 percent of LNG exports from Prigorodnoye will go to Japan and the
remainder to other Asia-Pacific nations such as South Korea and the United
States.
Under contracts lasting for as long as 20 years, Russian LNG will account for
some 7 percent of Japan's total LNG imports, allowing Japan to diversify its
energy supply sources.
In recent years, Russia has enhanced its resources diplomacy to take advantage
of its natural resources for diplomatic operations.
In 2007, Russian government-controlled gas company Gazprom took control of the
Sakhalin-2 project, which had been led by the Royal Dutch Shell group since its
initiation in 1994.
==Kyodo