Japan Petroleum Exploration Co (JAPEX) will construct by late 2005 a natural gas pipeline which would move natural gas from offshore oil fields in Russia's Sakhalin island to Japan. The pipeline could take two possible routes; a 1,440-km Pacific Ocean route linking Cape Soya in Hokkaido with the Tokyo Metropolitan Area, and a 1,120-km Japan Sea route linking Cape Soya with Niigata Prefecture, a company spokesman said. The Sakhalin-1 oil fields are operated by a Russian-led consortium that has invested about $725 mil this year in the development phase of the huge offshore reserves, a spokesman for Russia's Rosneft Oil Corp said.

Rosneft is a shareholder in the Sakhalin-1 project, alongside ExxonMobil, India's ONGC Videsh, Russia's RN-Astra, Russia's Sakhalinemorneftegas-Shelf, and Japan's Sakhalin Oil and Gas Development Co. Gas from the $12-bil project is slated for production in early 2005. The Sakhalin-1 block holds three fields including Chaivo, Arkutun-Dagi and Odoptu, and has estimated reserves of 307 mil mt of oil and 485 bil cu m of natural gas. Japex's share of natural gas is projected at around 800-mil cu ft (8-bcm) a year once production begins. The project is one of just three foreign production sharing agreements to have gone ahead in Russia so far.