Japan Has Enough LNG to Avoid Summer Power Shortages

Japan’s biggest buyer of liquefied gas has told media it has secured enough supplies until October and there is no risk of summer shortages during peak air-conditioning demand, Channel News Asia has reported.“We have secured sufficient LNG stocks for the peak summer demand season from August to October, and there are no issues regarding stable power supply,” a company executive said. He added that JERA has significantly reduced its purchases of LNG from Qatar and will ensure adequate supply for the winter season through its global trading division.Japan is one of the most energy import-dependent countries in the world, with a lot of its oil and gas previously coming from the Middle East. The war-related disruption in export flows has prompted Japan to rush to secure alternative supplies. These have mostly come from the United States, which has emerged as the biggest low-risk supplier of liquefied natural gas.Yet JERA is looking to ensure a diversified supply of the essential fuel. Last month, the company said it had signed a 20-year LNG supply contract with Malaysia’s Petronas, with deliveries set to begin in 2028. Malaysia is Japan’s second-largest LNG supplier, after Australia. In addition to higher LNG purchases from non-Middle Eastern suppliers, Japanese utilities were forced to ramp up coal generation earlier in the year to maintain power supply security.The Petronas deal is for 2 million tons of liquefied gas annually, adding to earlier supply deals agreed by JERA. The company, which is the largest buyer of liquefied natural gas in the world, last year presented plans to triple its purchases from the United States alone to as much as 5.5 million tons annually. That would have been a 10% increase on its current imports from the U.S., making up a third of its total LNG purchases.By Irina Slav for Oilprice.comMore Top Reads From Oilprice.comCaspian Oil Pipeline Shuts Down Again After Black Sea Drone AttackUK Regulator Targets Data Center Land Grab on the Power GridRefined Fuels, Not Crude, Are Driving the Oil Market Crunch