Japanese buyers of Russian liquefied natural gas are assessing how impending changes to shipping insurance – caused by the ongoing war in Ukraine – will affect deliveries from Russia’s main Sakhalin-2 project in Russia’s Far East.
Three Japanese insurance companies – Tokio Marine Holdings Inc., Sompo Holdings Inc. and MS&AD Insurance Group Holdings Inc. – will stop providing war risk cover at sea in Russian, Ukrainian and Belarusian territorial waters from January 1, spokespersons for the companies confirmed. to Bloomberg. The plans were reported on December 24 by the Japanese newspaper Nikkei.
Any further disruption to fuel shipments will add to the problems for scarce Japan, which is heavily dependent on imports, particularly from Sakhalin. Tokyo has repeatedly stressed the importance of Sakhalin-2 in maintaining the country’s energy security, especially as demand for heating fuel rises during the winter months.
Japan urges its insurers to maintain war cover for LNG shippers in Russian waters
Japan’s largest energy producer Jera Co. assesses the impact on its LNG purchase, said company spokesman Hirotaka Iwase. Regional energy supplier Kyushu Electric Power Co. receives information from shipowners and will continue to monitor the situation closely, a spokesman for the company said. tokyo gas co. and Tohoku Electric Power Co. are also investigating possible consequences, spokespersons for the companies said.
The measure is expected to affect ships sailing through the Black Sea and the Sea of Azov, among others, as well as off the coast of eastern Russia. According to the Nikkei report, international reinsurers are withdrawing from underwriting Russian-related risks.
Tokio Marine & Nichido Fire Insurance Co., a division of Tokio Marine and one of the insurers, has entered negotiations with reinsurers to resume underwriting and has received positive feedback from some of them, spokesman Itsuki Yoshihara said.
–With help from Grace Huang
Photo: Jera’s LNG-fired power plant at the Anegasaki Thurmal Power Station in Ichihara, Japan, in June 2022. Photo credit: Akio Kon/Bloomberg
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