Japan, Russia leaders to discuss uranium enrichment

TOKYO, Feb 27 (Reuters) Moscow hopes wide-ranging talks with Tokyo will strengthen economic ties, with plans for Russia to enrich uranium used at Japanese utilities and re-use it at Russian power plants high on the agenda, officials today said.

Prime Minister Mikhail Fradkov is heading a large delegation of Russians, including several cabinet ministers, on a visit to Japan for discussions on a broad range of economic cooperation centring on energy.

Japan has the world's third-largest nuclear power generation capacity after the United States and France, but sends most of its used uranium to Britain and France as it only has experimental uranium enrichment facilities.

Japanese Trade Minister Akira Amari told a news briefing that uranium enrichment would be on the agenda when Fradkov met Japanese counterpart Shinzo Abe for talks tomorrow in Tokyo.

''Regarding uranium enrichment, it is important to broaden our options,'' Amari said.

''The ministers will discuss (the matter) soon,'' he said, without giving further details.

Later today, Fradkov met Japanese Foreign Minister Taro Aso, Finance Minister Koji Omi and Amari for talks on issues ranging from energy to transportation and tourism.

''I hope these discussions will help promote economic relations,'' Fradkov was quoted by a Japanese official as saying.

Russian Energy Minister Viktor Khristenko and Atomic Energy Agency chief Sergei Kiriyenko are also visiting Tokyo this week.

The Japanese trade minister said that Russia's acceptance of inspections by the United Nations' nuclear watchdog and both countries' compliance with that body would be necessary, pointing out growing international concern over Iran's nuclear ambitions.

''It is also important to ensure that used nuclear fuel from Japan is not used for weapons,'' Amari said.

Uranium enrichment has become a hot topic due to Iran. British officials said world powers had agreed yesterday to work on a new UN Security Council resolution to put pressure on Iran over its nuclear programme. The West fears Iran is trying to build nuclear weapons, while Tehran says the programme is only for electricity.

RELATIONS EVOLVING Russia is becoming a more important oil and gas supplier to resource-poor Japan, which has imported about 90 per cent of its crude oil needs from West Asia producers such as Saudi Arabia and Iran.

Russian gas monopoly Gazprom took control of the Sakhalin 2 oil and gas project in December from Royal Dutch Shell and Japanese partners Mitsui&Co and Mitsubishi Corp. after months of Moscow threatening to delay the project.

That project is expected eventually to supply about 8 percent of Japan's liquefied natural gas (LNG) imports.

''Russia is the world's top- or second-ranked country regarding its natural gas and oil production as well as its reserves. The fact that (Russia's) Far East will be developed further is very significant for Japan and Russia,'' Amari said.

''The two countries' energy relations are evolving.'' After Gazprom's takeover of Sakhalin 2, a rival project, Sakhalin 1 led by US major Exxon Mobil, is being closely watched.

''Japanese companies said that if Sakhalin 1 shifts to LNG they would be interested'' in buying from it, Amari said, after receptions yesterday that he attended with business officials and the Russian energy minister.

''Khristenko said the decision would be up to investors led by Exxon Mobil. He said (Moscow) could not be directly intervene.'' Pressure is mounting on Sakhalin 1 to produce LNG -- natural gas chilled to a liquid state for transportation -- instead of pipelining gas for which it has failed to find a buyer.

Asian end-users usually buy natural gas as LNG and lack the facilities to receive pipelined gas.

REUTERS SY RN1205