Japanese government ministries are working together to ensure war risk insurance is in place to allow the country to continue to import LNG from Russia.
The move comes following the 1 January reinsurance policy renewals when exclusion clauses were placed on claims related to the Russia and Ukraine conflict.
The move severely limited the ability of three Japanese insurers, Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance to continue to provide cover for the Sakhalin 2 LNG exports to Japan.
A last-minute solution was found, but the Japanese government said it is continuing to work on securing future cover.
Ministry of Land, Infrastructure, Transportation and Tourism (MLIT) Maritime Bureau chief Ichiro Takahashi stressed the need for war risk cover at his regular Tokyo press conference.
“From the viewpoint of securing the stable supply of LNG from Russia the provision of war risk insurance is very important,” he said.
He said the MLIT, the Ministry of Economic Trade and Industry (MITI) and the Agency for Natural Resources and Energy are now working together on securing insurance and to “guarantee the safety of Japanese vessels.”
The move suggests that there is still some uncertainty over the future of war risk cover for Russian LNG projects.
Exclusion clauses
There are still some outstanding issues. The International Group of P&I Clubs General Excess of Loss (GXL) $500m in war cover, provided through the reinsurance market, has also been affected by the Russian conflict exclusion clauses.
The International Group members are currently attempting to determine what levels of cover can be provided through the GXL policy before the policy renews on 20 February.
It expected that war risk cover will be at considerably lower levels.
