Japan, China agree on joint gas project: Report

June 17th, 2008 - 4:37 pm ICT by IANS  

Tokyo, June 17 (DPA) Japan and China have agreed on a joint natural gas exploration project in the disputed East China Sea, Japanese media reported Tuesday. The two nations agreed to establish a joint venture for the project in the Chunxiao gas field, while China would take profits proportional to the size of investment it already made.

China began development of the Chunxiao field, which lies a few kilometres west of the Japan-claimed median line, as well as in waters around Duanqiao and Longjing fields.

The two governments were expected to officially announce the agreement this week as they continue negotiations on other fields.

“The Japan-China relationship has matured” to the extent that both sides consider the agreement on the gas field development as mutual benefits and make compromises, the daily Yomiuri Shimbun newspaper quoted sources close to the talks Tuesday.

The compromise by China to share with Japan the rights to invest in and profit from the area apparently reflects Beijing’s priority on economic development.

China does not recognize the Japan-claimed median line and instead claims its exclusive economic zone stretches further east to the edge of the continental shelf near Japan’s southernmost Okinawa island.

Japan accepted China’s offer to jointly develop the Longjing field as Beijing saw the need for Tokyo’s investment, the newspaper said.

The two sides are to define the exact zones for joint development through diplomatic channels and then place orders to Japanese and Chinese private companies to conduct the gas exploration, according to the sources.

The two countries had initially aimed for an agreement last year but the talks stalled, with China being reluctant to agree to Japan’s proposal of a joint development area spanning the median line.

In December, China presented a compromise plan with an area based on the median line except for Chunxiao. It was the first time that China acknowledged the median line.

Before the May summit, Beijing offered a compromise plan that would acknowledge Japan’s participation rights at Chunxiao, the newspaper said.

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