In a Good Way, They Don’t Understand: A U.S. Ally Does Not Want to Give Up Russian Gas 0 10

Despite the fact that the U.S. and Japan have agreed to a serious deepening of economic cooperation, it is not certain that Tokyo will abandon the import of Russian energy resources. This was reported by Reuters.

It reminded that U.S. President Donald Trump and Japanese Prime Minister Sanae Takachi signed a framework agreement on the supply of rare earth metals, as both countries seek to reduce China's dominance in this market. The White House promised that Japan and the U.S. would develop fair markets for critical minerals and rare earth metals. In particular, both countries plan to conclude an agreement on stockpiling, especially since, despite China's dominant position, the U.S. and Myanmar control 12 and 8 percent of global rare earth metal production, respectively.

In addition, Japan promised to invest $550 billion in the U.S. economy. The corresponding bilateral trade agreement will include, among other things, electricity generation and liquefied natural gas (LNG) production.

In this regard, Reuters noted that ahead of Trump's trip to Asia, the U.S. urged buyers of Russian energy resources, including Japan, to stop this import. Japan has increased its purchases of LNG from the U.S. in recent years, seeking to diversify supplies away from its key supplier, Australia. Moreover, Tokyo is preparing for the expiration of contracts for supplies under the Russian LNG project Sakhalin-2.

In June, JERA, Japan's largest LNG buyer, agreed to import up to 5.5 million tons of American LNG per year under 20-year contracts, with deliveries starting around 2030. This is approximately the same amount that Japan annually imports from Sakhalin-2.

However, as stated by a senior Japanese official, Tokyo wanted to continue importing LNG under the Sakhalin-2 project. The fact is that the delivery of this energy resource to Japan takes only a few days. Gas from Alaska takes about a week, while from the U.S. Gulf Coast it takes about a month.

In turn, Nobuo Tanaka, CEO of the consulting company Tanaka Global, stated that the U.S. wants Japan to give up Russian energy resources. But this is the closest and also very cheap source of LNG.

"Can the U.S. supply Japan with LNG at the same low price as that currently supplied from Russia? Can gas from Alaska be as affordable?" Tanaka rhetorically asked.