Japan's oil and gas industry got a bit of assurance from Brunei after learning it will receive stable long-term supplies of LNG from the sultanate.
The reassurance came after some considerable effort by the Japanese government, including Prime Minister Yukio Hatoyama who made a personal request of his counterpart from Brunei, Sultan Hassanal Bolkiah.
"I seek your cooperation in the supply of LNG and the development of our friendly bilateral ties," Hatoyama told Bolkiah on the sidelines of a recent Asia-Pacific summit.
Bolkiah replied, "We've had a good relationship in the past two decades on the supply of LNG, and there will be no problems with supply in the future."
It was the second time in as many weeks that Japanese officials pressed a member of the Bolkiah family for reassurances of Brunei's willingness to keep up the supplies of LNG.
Repeating requests
On Nov. 5, Japan's Foreign Minister Katsuya Okada met with Prince Mohamed Bolkiah, Brunei's Minister of Foreign Affairs and Trade, then in Japan on affairs of state.
"To Japan, Brunei is an important provider of LNG," said Okada, who also noted the importance of stable LNG provision, based on a long-term relationship of mutual trust between the two countries.
In response, Bolkiah said, "The relationship between Japan and Brunei in the energy field is a favorable one, and we hope to build a relationship that is beneficial for both countries."
The importance of these reassurances cannot be overstated, especially since Japan has virtually no energy resources of its own and must rely heavily on imports to meet its oil and gas needs.
As for LNG, Japan imports 60 million tonnes/year from countries led by Indonesia, Malaysia, and Australia. Due to recent problems, it has had with Indonesia, however, Japan has redoubled it efforts to diversify its sources of energy.
JBIC threatens
Underscoring those difficulties, Japan Bank for International Cooperation earlier this month threatened to withdraw its commitment to finance the construction of an LNG plant in Central Sulawesi if Jakarta insists that the LNG produced there is for domestic consumption only.
A consortium of Pertamina, Medco Energi Internasional, and Mitsubishi established PT Donggi Senoro LNG to build the $1.6 billion LNG plant, which will use gas from fields owned by Pertamina and Medco.
Mitsubishi joined the consortium with a majority share of 51%, and JBIC later agreed to finance the project hoping that the gas could be exported to Japan—a hope that has been dashed repeatedly by Indonesian government officials.
Indeed, the project's viability fell into a state of complete uncertainty in June when Indonesia's Vice-President Jusuf Kalla said that gas from the Senoro and Matindok fields intended to supply the Donggi LNG plant had to be sold domestically and not abroad.
Clearly, Brunei's reassurances are timely.
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