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Japan holds key to Arctic Sea Route, as both China and Russia make approaches to it

  • February 23, 2022
  • , Nikkei , p. 7
  • JMH Translation
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By Sakai Ko, Nikkei senior staff writer

 

The Northern Sea Route and LNG operations are two sides of the same coin. The military aspect of the route has grown after the 2014 Ukraine conflict. The Putin administration regards the Arctic Sea as a front in its confrontation with the U.S., and is steadily establishing a new order in the Far East.

 

The U.S. has been open about its concern with this development. A U.S. Navy report released in 2021 accuses Russia of conducting nontransparent military operations in the Arctic Sea, which should be open to all, and imposing restrictions on free navigation. 

 

Japan is not an uninterested party to this situation. In 2019, the Japan Bank for International Cooperation (JBIC) and Mitsui O.S.K. Lines (MOL) signed a memorandum of understanding to cooperate in LNG transshipment operations in Kamchatka. LNG production will begin on the Gydan Peninsula in 2023. Mitsui & Co. and others will invest in a business that plans to transport 80% of the produced LNG to Asia.

 

Diversification of energy sources is an issue for Japan. The fact that Russian products account for about 10% of imported LNG can be said to be the outcome of investment in Russia. The LNG operations might come to be used for military purposes without Japan’s knowledge, however.

 

On the other hand, China is looking intently at the Arctic Sea. The creation of a new Arctic Sea route would be of significance in the midst of the conflict between the U.S. and China. China has made overtures to Russia to become the largest foreign investor in Arctic Sea reclamation and LNG projects. [Russia’s new] transshipment facility [in Kamchatka] is primarily constructed by a Chinese company.

 

Itoh Shoichi, Senior Analyst at the Institute of Energy Economics, Japan, points out that Japan’s presence will further induce China and Russia to approach Japan. Both countries welcome Japanese funding, which can alleviate their over-dependency on each other. Moreover, Russia and China can claim that their projects are also important for Western nations, so as to avoid criticism from the U.S. and Europe.

 

There are many variables involving the Arctic Sea: Economic efficiency, energy security, and the Japan-U.S. alliance. It is time for Japan to assess its policy on such variables as Russia strengthens its hardline stance toward Ukraine. (Abridged)

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