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UPDATE 1-Energy and security on agenda when Australia, Japan leaders meet

SYDNEY/TOKYO, Oct 21 (Reuters) - Defence and energy security will be the focus of discussions when Japanese Prime Minister Fumio Kishida meets his Australian counterpart Anthony Albanese this weekend, officials from the two nations said.

"Australia is the most important country for Japan's energy policy," Kishida told reporters in Tokyo on Friday before boarding a plane for Perth. "I want to hold frank discussions over the importance of securing a stable supply of energy resources."

Several Australian state leaders have argued for local gas production to be prioritised for the domestic market to avoid shortfalls.

Australia is a major supplier of iron ore, coal and gas to Japan, and the meeting will be held in the capital of Western Australia, 3,700 km (2,300 miles) from the capital Canberra, to showcase the state's importance in supplying Japan's energy needs, including renewable energy. It is also a key source of beef and wheat to Japan.

Australia and Japan are also expected to sign a new security cooperation agreement, updating a pact struck in 2007, to respond to a significantly altered regional security environment, officials said.

Japan's ambassador to Australia, Shingo Yamagami, in a series of interviews with Australian newspapers this week, flagged agreements on intelligence sharing and military interoperability between the allies, pointing to China as the catalyst.

"We have to respond to a deteriorating security environment, not only in the South China Sea (and) East China Sea, but the entire Pacific region," he told the Australian newspaper.

"Whenever Chinese military planes approach our sky, we have to scramble flights against approaching Chinese aircraft. The number of scrambles in 2006 was only 22. But in 2021 the number shot up to 722," he was quoted as saying.

The leaders would look to strengthen the two nations' defence and security partnership, after a Reciprocal Access Agreement for defence forces to operate and exercise together was signed in January, the Australian government said in a statement.

Beyond Australia's biggest exports of iron ore and coal, Japan is looking to Australia to support its energy transition, by supplying liquefied hydrogen and ammonia, which it uses as a fuel in coal-fired power plants to cut carbon dioxide emissions.

"As Australia seeks to become a clean energy superpower, we will remain a steady and reliable supplier of energy to Japan including for new energy sources like hydrogen," Albanese said in a statement this week.

Australia and Japan are also members of the Quad group of nations, with the United States and India. (Reporting by Kirsty Needham in Sydney and Kantaro Komiya and Chang-Ran Kim in Tokyo; Editing by Raju Gopalakrishnan)

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