- The Washington Times - Friday, January 17, 2003

TOKYO The quest for oil may well bring Moscow and Tokyo closer after Japanese Prime Minister Junichiro Koizumi concluded his four-day visit to Russia this week by calling for bilateral cooperation to develop an oil pipeline from Siberia to Japan extending more than 2,485 miles.
The two countries have yet to sign a peace treaty ending World War II, largely because of a dispute over the southern Kuril Islands off Hokkaido and the coast of Siberia. While what it calls the Northern Territories still remain under Russian control, the Japanese government maintains that they were seized unfairly after Japan announced its surrender in the closing days of the war in August 1945.
Though Tokyo's hopes to settle the dispute over the islands during Mr. Koizumi's visit were dashed, his call to Russian President Vladimir Putin to jointly develop an oil pipeline is seen by many analysts as a breakthrough. This was because Mr. Koizumi's predecessors had largely shrugged off seeking closer ties with Russia until it returned the Northern Territories.
Indeed, Mr. Koizumi's chief Cabinet secretary, Yasuo Fukuda, has said that construction of a Siberia-to-Japan pipeline would be a "pillar of Japan-Russia economic cooperation."
Japan's Ministry for Economy, Trade and Industry said Russia has estimated that if the project were to go ahead, it would cost about $5 billion. The pipeline would run from Angarsk, west of Lake Baikal, to Nakhodka on the Sea of Japan/East Sea, and carry about 1 million barrels per day.
The agreement, however, is not yet concluded. And the possibility remains that it may fall through not because of diplomatic disputes, but because of spats among rival Russian oil companies vying to build different pipelines.
If an agreement to provide Japan with oil had been signed, Mr. Putin's government would have been able to secure much-needed cash and Tokyo would have rested easier in the knowledge that the pipeline would cushion it from difficulties in securing oil from Arab countries.
A Japanese government source said that the plan faced difficulty largely because of internal debate in the Kremlin over choosing between the Siberia-Japan pipeline planned by Transneft, a state-controlled company, and a project by Yukos, an oil group that has planned to supply Siberian oil to China through a 1,491-mile pipeline costing $1.8 billion.
The official said that there may be a third alternative whereby Russia extends its Siberian pipeline to South Korea, instead of Japan.
Mr. Koizumi made clear at a news conference ending his Russia visit Sunday that a pipeline to Japan would boost not only political ties, but also economic ones.
Securing Russian petroleum would ease Japanese concerns about energy disruptions in the event of a U.S. attack on Iraq. Moreover, Japanese oil companies already had taken steps to obtain a stake in oil-rich Russia, though they are at a disadvantage compared with those of other countries in aggressively pursuing Russian contracts.
Japan is the world's fourth-largest energy consumer, but has virtually no oil reserves of its own. Though Japan is one of the world's most energy-efficient countries, it cannot survive without a steady supply of petroleum products.
Most of the 5.44 million barrels of oil it consumes per day is imported from members of the Organization of the Petroleum Exporting Countries.

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