Japan, Russia to boost business ties, restart territorial talks

Thu Apr 25, 2013 5:18am EDT
 
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By Antoni Slodkowski

TOKYO (Reuters) - Japan and Russia expect to clinch up to 20 deals, launch an investment fund and reopen talks on a territorial row that has kept them from signing a peace treaty formally ending World War Two when Japan's prime minister goes to Moscow next week.

Japan also expects Russia to present a proposal for Japan's participation in building a pipeline connecting East Siberian gas fields and a planned $38 billion Vladivostok gas hub built by Gazprom (GAZP.MM: Quote), Deputy Chief Cabinet Secretary Hiroshige Seko told Reuters on Thursday.

The summit between Shinzo Abe and President Vladimir Putin, the first between leaders of the two countries in a decade, may open the door to progress in the long-stalled territorial talks given converging strategic interests and a Japanese premier who, for the first time in a decade, appears to have the influence and staying power needed to make commitments.

Japan is the largest importer of liquefied natural gas (LNG) in the world and could provide Russia with the money and technology to develop its under-populated east. Japan, for its part, sees Russia as a strategic partner as it looks to diversify and cut the costs of LNG imports, which shot up after a 2011 disaster at its Fukushima nuclear plant.

"With the aim of diversifying energy supplies in mind, we look forward to an offer from the Russian side during this visit," Seko said. He added, however, that a major deal on the project was unlikely during Abe's visit.

Abe's trip follows two months of talks on expanding gas-supply agreements in which Japan has been pressing Gazprom to present a detailed plan of the Vladivostok project that would spell out the potential role of Japanese companies.

Abe will be accompanied by a 120-strong business delegation including 30-40 chief executives of trading houses, banking, healthcare and agriculture companies, Seko said.

"We want to sign up to 20 MOUs (memoranda of understanding) between Japanese and Russian companies and launch an investment platform," he said. Japan Bank for International Cooperation and the Russian Direct Investment Fund are looking to start a fund of up to $1 billion to encourage investment in Russia, sources told Reuters.   Continued...

 
Russian President Vladimir Putin (R) meets with Yoshiro Mori, former Japanese prime minister and Special Envoy of current Prime Minister Shinzo Abe, at the Kremlin in Moscow, February 21, 2013. REUTERS/Sergei Chirikov/Pool