Japan Pipeline Development & Operation,Inc.(JPDO) company profile Project Outlines history Contact Information Home  

 History of our Efforts toward Putting the Project to Commercial Use


Japan Pipeline Development Organization (JPDO) was founded to make a reality of the idea for the project first envisioned in 1974. JPDO consulted with the Sakhalin state government and the Russian state-run corporation and asked for their cooperation in the project. A major U.S. company group was also consulted and their cooperation in the project sought.


The “International Conference on Promotion of the Sakhalin- Japan Natural Gas Pipeline”, Hokkaido’s first international conference concerning the natural gas pipeline, was held attended by representatives of the world’s major oil companies as well as political, administrative, economic, academic and media circles both inside and outside Japan, under the auspices of the Hokkaido Development Bureau, the Hokkaido Bureau of International Trade & Industry, the Hokkaido Government, the Russian General Consulate and the U.S. Consulate General. Following this, a feasibility study undertaken in conjunction with the major U.S. oil company Texaco reached the conclusion that the project was feasible. The plan for the project was presented at the London International Conference. Cooperation was sought from the Russian parties concerned including the Russian Fuel & Energy vice minister. The project plan was presented at a general meeting of the Federation of Diet Members for Promoting the Asian Energy Community which was held at the Diet Members’ Building.


JPDO and executives from U.S. Texaco visited the Hokkaido Governor and asked for cooperation and assistance in joint US-Japan implementation of the project. Domestic and international cooperation was also sought at an open forum with representatives from Japan, the U.S. and Russia as the primary participants.


As an initial consultation with the Japanese government, a detailed survey report for the pipeline construction compiled by JPDO and U.S. United Technologies Corporation was submitted to relevant government organizations and municipalities. A resolution to promote the earliest possible construction of pipeline through Hokkaido was passed at a convention of All Hokkaido Chambers of Commerce and Industry, which has since been reaffirmed at every subsequent annual convention.


In Moscow, JPDO held talks with the Russian government, Russian state-run Gazprom Group and Rosneft Group, at which a basic agreement was reached covering gas supply by the Russian side, pipeline construction, and terms for entry into the project. At a session of the Hokkaido Assembly, the Governor advocated environmental arrangement for the pipeline construction and benefit of the use of pipeline gas. A number of municipal assemblies also issued written statements backing the project.


Speaking in turn at a session of the diet, the ministers heading each of the government ministries concerned, along with top officials from the Ministry of Economy, Trade and Industry, expressed their commitment to taking measures in support of development of the pipeline. The Diet Members’ Federation for Promoting National Trunk Pipeline Development was formed by a bipartisan group of lawmakers based on the Democratic Party of Japan. The Diet Members’ Federation for Promoting Sakhalin Natural Gas Pipeline Development was formed at Liberal Democratic Party’s headquarters. The chairman of the Federation was among those invited to the Hokkaido Convention for Promoting Sakhalin Natural Gas Pipeline Development which was held in Sapporo.


A Sakhalin Seminar was held in Yuzhno-Sakhalinsk in cooperation with the Sakhalin State government and the Russian state-run corporate group. JPDO consulted with top officials of the U.S. Embassy and the U.S. Consulate General in Sapporo, and the chief minister expressed their support for the project. In Moscow, JPDO had talks with the President’s representative extraordinary and plenipotentiary. A joint memorandum was signed with a Russian state-run Gazprom Group company, affirming the commitment of both sides to jointly undertake the project.


JPDO and the Russian state-run Gazprom Group company signed agreement on all matters required to begin implementation of the project. With a contract signed with the Gazprom Group company on a feasibility study for the pipeline from Russia to Japan, feasibility study work was begun. Concrete steps were taken on preparatory work for the pipeline in Japan in cooperation with the Ministry of Land, Infrastructure and Transport, the Ministry of Economy, Trade and Industry and the municipalities involved. At the Hokkaido Convention for Promoting Sakhalin Natural Gas Pipeline Development, delegates of the Liberal Democratic Party, the New Komeito and the Democratic Party of Japan all expressed their intention to promote the project.


With an engineering study report on the feasibility of the Sakhalin-Hokkaido pipeline project based on joint Russia-Japan work and a project action plan, prior consultation with the Russian government was started concerning an application for a government permit. Mutual understanding was reached for gas supply from Russia, pipeline construction, project entry and participation in investment. At the Moscow Oil and Gas Conference, JPDO presented the result of the feasibility study in conjunction with the Gazprom Group company. Following prior consultation with the Russian government, detailed discussions began with Gazprom itself. The Ministry of Economy, Trade and Industry issued the Minister’s written recommendation on Nayoro Natural Gas Power Station, in accordance with a review by its Thermal Power Committee.


An interdisciplinary executive meeting in Gazprom, representing a cross-section of its various departments involved, concluded that the project shows promising. Russia’s Eastern Gas Program was officially approved. A confidentiality agreement on the progress of detailed discussions with Gazprom was signed with its vice president responsible for the project. The corporate name was changed to Japan Pipeline Development & Operation Inc. (JPDO).


Full-scale preparation of formalities for the construction of the pipeline from Wakkanai to Tomatoh began. JPDO received a written reply from Hokkaido Electric Power Co., Inc. indicating the possibility of being linked to the Tomatoh Natural Gas Power Station by pipeline. The Government of the Russian Federation entered the project as an addition to the Eastern Gas Program, one of Russia’s national policies. The Russian government granted to Gazprom a license to develop a number of gas fields including Sakhalin-3 Kirinsky Block. At the request of the Russian parliament, JPDO presented the project at the Russian Far Eastern International Economic Forum in Russia.


With the participation of Gazprom itself and a Gazprom Group company, practical issues began to be coordinated. Gazprom started a boring survey in Sakhalin-3 Kirinsky Block. The South Korean side indicated its intention to enter the project, centering on its upstream business.


The Government of the Russian Federation accepted the project plan. With the Energy Vice Minister playing a central role, specific consultations began with Gazprom. Gazprom conducted a full-scale boring survey in Sakhalin-3 Kirinsky Block. The Hokkaido Council for the Promotion of Introducing Sakhalin Natural Gas was set up and began requesting early implementation of the project from the ruling party and the government.


The Great East Japan Earthquake led Japan to a fundamental review of its energy policy. Our project began to attract attention from various fields as an effective means to secure clean energy and reconstruct the disaster areas. The “Energy & Environment Council” was set up at the Prime Minister’s Official Residence, and, as one of Japan’s new revolutionary energy strategies, set out policies to develop extensive nationwide natural gas pipeline and to drastically ease various regulations on pipeline construction. In response to the changing conditions, the pipeline plan from Sakhalin to Hokkaido has been rebuilt as the “East Japan Natural Gas Pipeline Project” to extend the pipeline to the Tohoku and Kanto regions in eastern Japan.


The Ministry of Economy, Trade and Industry set up an expert panel on the infrastructure development required to shift to natural gas in the Coordination Subcommittee of the Advisory Committee on Natural Resources and Energy, and after discussing on the basic scheme to develop extensive nationwide natural gas pipeline, decided the policies for its development. At a Japan-Russia summit-level meeting (with Japan represented by the ruling party, and Russia by Gazprom), both sides agreed to give detailed consideration to Japan-Russia pipeline. Following this, the economy, trade and industry minister announced at a press conference that all aspects of the project will be considered separately and in specific detail in consultation with the ruling party. Invited by the Russian side, JPDO president gave a presentation on the project at the Sakhalin Oil & Gas 2012 Conference.


The advent of the new administration, a coalition of the Liberal Democratic Party and New Komeito Party, gave a fresh impetus to a review of the project with the aim of adjusting its consistency with a number of top-priority national policies including rebuilding disaster areas, strengthening national land, developing industries and economies, restructuring energy and reinforcing Japan-Russia cooperation. At a summit and other meetings, both countries reached a basic agreement on reinforcement of Japan-Russia energy ties, especially with regard to natural gas, a subject of growing interest in each country. The Diet Members’ Federation for Promoting Japan-Russia Natural Gas Pipeline Development was formed by the ruling coalition. JPDO’s president Hideo Ogawa was appointed to serve as a special adviser to the secretariat of the Federation. Since then, review meetings, hearing surveys and field surveys have been conducted mostly by the Federation.


At its general meeting the Diet Members’ Federation for Promoting Natural Gas Pipeline Development passed a resolution of “proposals and requests” to the government, which it submitted to the prime minister’s office as well as concerned ministers. Both the Foreign Minister and the Minister of Economy, Trade and Industry gave positive responses. The Minister of Economy, Trade and Industry in particular clearly stated that he would give serious consideration to the pipeline as an option to LNG. While Japan-Russia relations remained stalled due to the outbreak of the Ukraine issue, a Japan-Russia summit meeting was held in November.


As intergovernmental Japan-Russia consultation was resumed, the Diet Members’ Federation for Promoting Pipeline Development passed a resolution of requests to the government asking for its cooperation, which it submitted to the prime minister’s office as well as concerned ministers. It also asked key government and business leader groups in Japan and Russia for their cooperation. An office was established in JPDO for preparing to implement the project. JPDO's president was invited to participate in the East Russia Economic Forum hosted by President Putin. At a Japan-Russia international conference, both the Russian and Japanese sides presented objective data showing that transportation of natural gas to Japan via pipeline is far superior to that of LNG.


Under Prime Minister Abe's leadership, Japan has moved vigorously to develop closer relations with Russia. Japan-Russia summit talks were held in Sochi in May, where Prime Minister Abe proposed to President Putin "Eight areas of economic cooperation with Russia," which clearly specified the development of Russia’s Far East and of energy closely related to the project. In September, Japan-Russia summit talks and the Eastern Economic Forum were held in Vladivostok. JPDO's president was invited by the Adviser to the President of the Russian Federation to be a panelist for the Forum's session on large-scale projects, where he gave a presentation on the project. He also had a talk with top officials of the federal government, and they reached a basic agreement on Japan and Russia developing the project in bilateral cooperation. He talked with key figures on the Russian and Japanese sides as well, and made an appeal for the project both at home and abroad. Since the Forum, both countries have accelerated concrete steps for the projects related to the eight areas of economic cooperation. JPDO has also begun to work out specifics for the implementation of the project with the cooperation of major specialized agencies. In this way, it has been confirmed that pipeline (line) and LNG (point) will be connected by a network to enable the two countries to both enjoy advantages and contribute to the respective national interests by working together for mutual harmony and benefit, just as in Europe and America. A Japan-Russia summit meeting was held in Japan in December. For the Agreement on Economic Cooperation in Ten Areas, it was also agreed to intensify the detailed study and discussion of the project based on the economic entities. In parallel with this, the management centered around the vice-president of Gazprom (the economic entity on the Russian side) and the group centered around the JPDO president (responsible for the coordination of the economic entities on the Japanese side) discussed the practical matters, and agreed to begin joint efforts in detailed matters necessary for the implementation of the project from now on.


JPDO summarized pre-FS (feasibility studies) from objective verifications by major specialized agencies, and submitted it to the Japanese and Russian sides. In April, the Japan-Russia Natural Gas Pipeline Promotion Forum hosted by the executive committee for the Forum (JPDO serves as its secretariat) centered around the Diet Members’ Federation for Promoting Pipeline was held at the International Meeting Room at the Diet Members’ Hall. The Forum was attended by policy study groups and expert groups in Japan and Russia as well as leading Japanese and international business groups. At the press conference after the Japan-Russia summit meeting in Moscow, President Putin clearly said that the two leaders had discussed the project. In August, the “Japan-Russia Natural Gas Pipeline Promotion Forum Hokkaido Meeting” was held in Hokkaido, which is the gateway to Japan for the pipeline from Sakhalin to reach its shore, and attended by representative organization groups from various fields and regions of Hokkaido. In September, the “Eastern Economic Forum” was held in Vladivostok, during which JPDO had individual meetings with a senior official of the Russian government and a Gazprom executive, and discussed the detailed matters of the project.


In order to ask for their understanding and cooperation of the Tohoku block which connects the Hokkaido block and the metropolitan area block by the pipeline, the “3rd Japan-Russia Natural Gas Pipeline Promotion Forum in Tohoku” was held in Sendai city. As we held the “Japan-Russia Natural Gas Pipeline Promotion Forum” in each block such as Hokkaido, Tohoku and metropolitan area asking for their understanding and cooperation of the local communities, and we conducted information disclosure and detailed explanation of this project. Then we started project implementation related work with the cooperation of domestic and overseas investment and loan institutions and business firms. As we divided the whole project into blocks to classify areas and we take a step-by-step approach to carry out this project, we started project implementation related work for the phase 1 in Hokkaido block. We were invited this year again to the “4th Eastern Economic Forum” hosted by the Russian Federation. We attended not only lectures and discussions that were given by the President of the Russian Federation, the Prime Minister of Japan, the President of the People’s Republic of China, the Prime Minister of the Republic of Korea, the President of Mongolia in the forum but also we asked for their cooperation to this project through interaction with many top officials from home and abroad at various kinds of sessions and receptions in the forum.