For Japan’s leader, Russian gas is also a local matter

TOKYO—The global crisis over Russia’s invasion of Ukraine is also a hometown for Japanese Prime Minister Fumio Kishida, because voters in his Hiroshima district rely on Russian gas to cook their dinners.

Japan and European nations have excluded Russian oil and natural gas from sanctions they imposed after President

Vladimir Putin

the Ukraine war began, allowing Putin to keep his main source of foreign exchange. Mr. Kishida says Japan’s energy security would be in jeopardy from a sudden outage.

The situation is particularly serious in Hiroshima prefecture (state), part of which Mr. Kishida represents in Parliament.

Hiroshima gas Co.

It gets about half of its gas from Russia, a much higher proportion than the rest from Japan.

The consequences of the harsh economic sanctions against Russia are already being felt around the world. The WSJ’s Greg Ip joins other experts to explain the significance of what has happened so far and how the conflict could transform the global economy. Photo illustration: Alexander Hotz

It is an example of how the web of connections between Russia and the global economy makes it difficult for leaders of democracies to punish Putin for invading Ukraine without retaliation at home. German Chancellor Olaf Scholz has ruled out canceling its energy agreements with Russia for now, saying that would plunge the whole of Europe into a recession.

western companies keep selling products such as cosmetics and ice cream in Russia, while

tobacco from japan INC.,

a third owned by the Japanese government, it maintains its large cigarette business in Russia.

Japan imports most of its energy, including natural gas, from the Russian island of Sakhalin in the Far East, just north of Japan. At a press conference on March 16, Mr. Kishida was asked about the Sakhalin gas field and replied, “In terms of stable energy supply, I see it as an important project for our nation.”

Overall, Japan gets about 9% of its natural gas from Russia. But Hiroshima Gas Co. made a deeper commitment to Moscow in a 2006 deal under which it will import up to 210,000 tons of liquefied natural gas from Sakhalin each year from 2008 to 2028. The company says the contract accounts for about half of the gas it needs to. annually.

A Hiroshima Gas spokesman said supplies from Sakhalin were arriving normally. The company is monitoring the situation and planning alternatives in case Russian gas is cut off, he said.

Hiroshima Gas is headquartered in the central district of the city of Hiroshima represented since the 1990s by Mr. Kishida. Starting in 2009, Hiroshima Gas executive Hideki Fukayama, then chairman and later director, donated 240,000 yen, equivalent to $2,000, each year to the ruling Liberal Democratic Party political organization in the district, which is headed by Mr. .Kishida.

Japanese Prime Minister Fumio Kishida, left, and President Biden at NATO headquarters in Belgium earlier this month.


Photo:

Kyodo News/Zuma Press

After Mr. Fukayama stepped down as president in June 2017, he stopped his donations and the new president, Kozo Tamura, began donating at the same rate of $2,000 a year through 2020, the most recent year for which records are available. Mr. Tamura was one of only three people that year to donate more than $500.

Hiroshima Gas and a representative for Mr. Kishida said the donations were personal and had nothing to do with company business. The donations were within the legal limits and reported as required by the ruling party. The company declined to make Tamura available for comment, and calls to the numbers listed for him and Fukayama went unanswered.

Japan paid more than $3 billion for Russian gas in 2021. If it were to replace it with supplies bought at today’s sky-high spot prices, it would cost many more billions, analysts say.

“The economic consequences would be prohibitive,” said Kaushal Ramesh, an analyst at Rystad Energy. He noted that Sakhalin gas is also convenient, taking just two days to reach Japanese ports, compared to more than a month for many US shipments.

A typical household in Tokyo is already paying about 30% more for electricity than it was in early 2021 due to high prices for natural gas and other fuels that fire power plants.

The prime minister’s advisers rejected the notion that Japan’s purchases from Russia represented significant support for Putin’s war machine. One attendee said Japanese money is less than a tenth of what European nations pay. The aide said that if Japan canceled its contracts, other buyers such as China would step in to buy the gas, perhaps at a higher price than Japan had set.

“It would be more like sanctions on Japan than sanctions on Russia,” he said.

The Japanese media was generally sympathetic to that view. One commentator, Sohei Ide of Kyodo News, disagreed, saying that with some electricity conservation, Japan could do without Russian power. “Isn’t this a cost we should pay to protect the international order that took so many sacrifices to build?” Mr. Ide wrote in a comment.

Energy trade has been one of the few areas of cooperation between Japan and Russia amid a long-running dispute over the islands that Soviet troops seized from Japan at the end of World War II. Former Prime Minister Shinzo Abe has met with Putin more than two dozen times in an unsuccessful effort to reach a deal. On March 21, the Russian Foreign Ministry, citing Japan’s sanctions, said it was ending the talks.

write to Peter Landers at peter.landers@wsj.com

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