Although it will be Russia that decides where the pipeline will be built, the director of the Department of Oil and Gas Complex of the Sakhalin Region, Galina Pavlova, believes that the final decision on where the pipeline would connect to lies in the hands of the international consortium that is developing the Sakhalin oil and gas project.

Sakhalin-1 is one of the world's largest direct foreign investment projects to take place in the country and counts Exxon Mobil Corp subsidiary Exxon Neftegas Ltd and Japan's Sakhalin Oil and Gas Development Co amongst its investors.

The Sakhalin-Japan route, expected to be the first of this kind for Japan, would involve a long underwater pipeline from the Sakhalin to Hokkaido with an overland pipe to Tokyo. The China route would involve a shorter underwater route between Sakhalin and the Russian mainland before the gas is shipped to China.

Pavlova admits that, while the Japanese government is less than enthusiastic about the project, it has received a lot of support from Japanese oil and gas companies. The Sakhalin-1 consortium is also said to be keen on the Japan route.