Russia, Japan Working Closely to Energize Bilateral Economic Ties

Earlier this week, Japanese Economic Minister Hiroshige Seko arrived for a visit to Moscow. On Friday, the minister took part in two sessions of the recently established Russian-Japanese working groups.

The meeting of the Russian-Japanese Energy Council involved Russian Energy Minister Alexander Novak. During the meeting, participants discussed production, transportation and processing of oil and gas. Special attention was paid to Russian energy supplies to Japan.

"As for Japan, its energy strategy is aimed to reduce its dependence on the Middle East and diversify energy suppliers," Seko said.

In this context, Tokyo has paid special attention to an undersea power cable project. The Japanese government hopes that the project could help resolve the territorial problem over the South Kuril Islands. The long-standing territorial issue is expected to be discussed at the December talks.

The project is expected to be a 40-km long undersea power line connecting a RusGidro thermal power plant in Russia’s Sakhalin with Japan’s northernmost city of Wakkanai.

Currently, a power plant that would be capable of supplying energy to Japan is being constructed in southern Sakhalin. Japan Bank for International Cooperation (JBIC) is involved in the negotiations over funding the project. According to estimates, the projects costs will be around $6 billion. However, it is expected to become profitable because Russian electric energy is three times cheaper than Japanese.

The meeting also touched upon such issues as nuclear energy and renewable energy sources.

In energy cooperation with Tokyo, Moscow wants to go far beyond simply exporting energy, said Valeriy Kistanov, director of the Center for Japanese Studies at the Institute for Far Eastern Studies.

"The goal is to expand Japan’s involvement in developing energy infrastructure in Russia’s Far East. Russian wants to shift from direct energy exports to supplying more advanced energy products. In particular, Japan may take part in creating petrochemical infrastructure in the region. The main goal is take into account the interests of both sides, especially for the future," Kistanov told Sputnik Japan.

The second meeting in which the Japanese minister participated was held at the Russian Economic Development Ministry. Minister Alexei Ulyukayev said that Moscow and Tokyo should work to develop the best conditions for Russia and Japanese companies.

The working group has selected a total of 90 joint projects. Currently, Japanese businessmen are seriously considering nearly 40, with a total of $9.6 billion. However, the funding of the projects is facing difficulties due to Western sanctions against Russia.