Japan Gas, Technip of France in Russia LNG project

TOKYO (AP) -- JCG Corp., a Japanese engineering company, and French oilfield services company Technip S.A. have won a contract for a liquefied natural gas plant in central Russia, the companies said Wednesday.

The consortium between JCG and Technip will provide cost estimates and engineering services for an LNG plant in central Russia's Yamal Peninsula that is being built by JSC Yamal, a joint venture between Russia's Novatek and Total of France.

The value of the deal was not disclosed. It is JCG's first in Russia and a first step in entering Russia's LNG industry as Japan and Russia put a decades old territorial dispute aside for the sake of economic cooperation, especially in energy.

Japan is keen to expand its access to lower-cost natural gas to meet rising demand due to the suspension of almost all its nuclear power generation following the Fukushima Dai-Ichi nuclear plant disaster.

Russia, meanwhile, is seeking to expand sales of natural gas in Asia. Since Yamal is in the far north, if the project is built, LNG shipments would go to Asia during the summer months and to Europe during the winter, the financial newspaper Nihon Keizai Shimbun reported.

Assuming the project is deemed feasible, JCG and Technip would build the plant with an annual capacity of 16.5 million tons. That would amount to about a fifth of Japan's total consumption, the report said.