Japan - Liquefied Natural Gas (LNG)Japan - Liquefied Natural Gas
Japan is the largest liquefied natural gas (LNG) buyer in the world, importing almost 84 million tons in 2017. Australia, Malaysia, Qatar, Russia, and Indonesia are Japan’s top suppliers of LNG.
LNG will likely be a significant policy issue for Japan given its need to secure stable, inexpensive, and relatively clean energy resources. The U.S. Commercial Service in Japan believes that there are two primary types of market opportunities for U.S. LNG firms and interests: the Japanese purchase of LNG produced in the U.S. and Japanese investment in U.S. LNG infrastructure.
Not having imported any U.S.-produced LNG in the recent past, Japan is now expected to import billions of dollars of LNG from the U.S. in coming years. The purchases will likely involve the major Japanese electric and gas utilities, with JERA expected to be the largest importer.
With regards to infrastructure, Japanese companies are considering further investments in U.S. power plants and gas liquefaction export facilities. Such infrastructure investors would again, include, electric and gas utilities, as well as major trading companies, who said recently they will increase their LNG production capacity by 60% by 2020. Being eager to continue its overseas involvement in the LNG value chain, how much of Japan’s investments will be made in the U.S. versus other countries will be of key interest.
In May 2018, the shale-gas-derived LNG, which was produced in Maryland, arrived at a facility in Yokohama. This was the first long-term contracted U.S. shipment to Japan with the participation of Japanese companies such as Tokyo Gas and Kansai Electric. CS Japan believes that U.S. LNG exports are positioned to capture a significant share of the Japanese market in the future as Japan diversifies its supply. As of July 2, 2018, three U.S. export terminals already exist, and five have been approved by Federal Energy Regulatory Commission (FERC) and are under construction.
Japan’s LNG importers such as JERA, Tokyo Gas, Mitsui & Co., etc. have signed long-term contracts with the Lower 48 States LNG exporters such as Freeport, Cameron, Cove Point, and Jordan Cove. These facilities are all expected to begin exports between 2018 and 2020. The majority of Japan’s LNG imports are under long-term contract with existing foreign suppliers, and these contracts are set to expire by the end of the next decade. The expiration could open up opportunities in the 2020s for the supply of U.S.-made LNG to Japan, either under long-term contracts or in the spot market.
The LNG Producer-Consumer Conference 2018
October 22, 2018
METI, Asia Pacific Energy Research Centre (APERC), Nogoya
Gastech Exhibition & Conference 2018
September 17-20, 2018
Agency for Natural Resources and Energy
Ministry of Economy, Trade and Industry
Mr. Takahiko Suzuki, Senior Commercial Specialist
CS Japan Contact
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Japan Oil and Gas Trade Development and Promotion