Asian importers of Russian gas were yesterday scrambling after Russian President Vladimir Putin said that “unfriendly” countries must pay for Russian gas in rubles, in the latest jolt to global energy markets after Moscow’s invasion of Ukraine.
Taiwan, Japan and South Korea were on the list of countries deemed unfriendly. They all import liquefied natural gas (LNG) from the Sakhalin-2 and Yamal projects in eastern Russia.
Putin on Wednesday said that Russia would continue to supply gas in volumes and prices fixed in contracts, but would require payment in rubles.
Photo: AFP
In Taipei, the Ministry of Economic Affairs said that state-owned CPC Corp, Taiwan (CPC, 台灣中油) has one gas shipment arriving from Russia at the end of the month, adding it had received “no news that the payment system will be adjusted.”
Japan, the biggest importer of Russian LNG in Asia, said it had no idea how Russia would enforce that requirement.
“Currently, we’re looking into the situation with relevant ministries, as we don’t quite understand what [Russia’s] intention is and how they would do this,” Japanese Minister of Finance Shunichi Suzuki said in parliament.
Japan imported 6.84 million tonnes of LNG from Russia last year, Refinitiv trade flow data showed, making up nearly 9 percent of its LNG imports.
JERA, Japan’s biggest LNG buyer, has not received any notification from Sakhalin Energy, the joint venture that operates Sakhalin-2, to change the currency of payment from the US dollar, a company spokesperson said.
The spokesperson added that the country’s biggest power generator would keep gathering information.
A thermal power and fuel joint venture between Tokyo Electric Power Co Holdings and Chubu Electric Power Co, JERA buys about 2 million tonnes a year of LNG from the Sakhalin-2 project under long-term contracts, Japan Oil, Gas and Metals National Corp data showed.
Tokyo Gas Co and Osaka Gas Co, the country’s two biggest local gas suppliers, were also checking details on the ruble requirement, company spokespersons said yesterday.
Tokyo Gas, one of Japan’s largest LNG buyers, declined to comment on any details of its long-term contract for 1.1 million tonnes per year with Sakhalin Energy, including what currency it can use for payment.
Sakhalin Energy is 50 percent owned by Russia’s PJSC Gazprom, with Shell PLC holding a 27.5 percent stake while the rest is held by Japan’s trading companies Mitsui & Co and Mitsubishi Corp.
Shell on Feb. 28 said that it would quit the project, and the Japanese government has said Shell’s exit did not affect Japan’s energy imports.
Mitsui and Mitsubishi are checking details of Russia’s announcement, their spokesmen said.
South Korea, Asia’s third-largest importer of Russian LNG, expected to be able to continue imports, with the South Korean Financial Services Commission saying it would do whatever was necessary to facilitate trade.
Korea Gas Corp said it imports about 2 million tonnes per year of Russian LNG, making up about 6 percent of the company’s imports.
However, the company does not transact directly with Russia as its purchase contract is with Sakhalin Energy and payments for the gas go into a Japanese bank in Singapore, it added.
“Since we are making payments to that Japanese bank, we are not currently seeing issues now, but we are closely monitoring the development,” a Korea Gas official said.
The call for payments in rubles was seen as Putin’s way of trying to shore up the currency, which has collapsed after the imposition of sanctions on Russia.
Putin said the government and central bank had one week to come up with a solution on moving operations into rubles and that Gazprom would be ordered to make the corresponding changes to contracts.
The move is unlikely to work, said Eswar Prasad, a trade policy professor at Cornell University.
“Foreign importers would no doubt be happy to pay for their purchases of Russia’s exports in a currency that is collapsing in value, although getting access to rubles in a manner that does not fall afoul of sanctions could be tricky,” Prasad said.
Getting paid in rubles would do little to secure the hard currencies Russia needs to prop up its currency’s value in global markets or pay for imports from other countries, he added.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS