Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

Japan in focus of natural gas exporters as long-term contracts are set to expire by end of decade

Global natural gas producers are looking at Japan with renewed interest as many of the long-term contracts are expiring and more are set to expire by the end of the decade. While Japan only accounts for 3.1 percent of global natural gas demands, it accounts for 10 percent of the global imports including both tankers and pipelines. It accounts for almost 1/3rd of the global LNG (liquefied natural gas exported via tankers) demand.

As of 2016, Australia is the biggest exporter of LNG to Japan, accounting for almost 27 percent of total exports, followed by Malaysia (18.8 percent), Qatar (14.5 percent), Russia (8.8 percent), and Indonesia (8 percent). As many of the long-term contracts are set to expire by the end of the decade, especially with Qatar, Japan is increasingly looking at other sources of LNG, mainly the United States. The diversification has already begun. Japan’s Kansai Electric will purchase an annual 800,000 tons of shale gas LNG from the Cove Point export facility in the U.S. state of Maryland for the next 20 years. Next spring, the Japanese utility will begin buying 400,000 tons per year from a plant in Louisiana, also for a term of 20 years. These 1.2 million tons of new long-term LNG supply equals more than 10 percentage of Kansai Electric's total annual imports. The utility bought a roughly 9.4 million tons of the fuel in 2016, most of which came from Australia, at 44 percentage, followed by the Middle East. The U.S. accounted for just 2 percentage. Other Japanese utilities are also ramping up imports of U.S. shale gas. Jera, a fossil-fuel supply joint venture of Tokyo Electric Power Co. Holdings and Nagoya-based Chubu Electric Power, in January became the first Japanese importer of shale-derived American LNG. The venture is also expected to buy 2.32 million tons annually for 20 years from the Freeport LNG hub in Texas, set to begin operations next year. Tokyo Gas will procure 1.4 million tons a year from the U.S. for 20 years, beginning in the second half of fiscal 2017.

While the United States is looking to make Japan its top destination in Asia, Russia is also looking for similar opportunities in Japan looking to increase market share using the diplomatic channel.

  • ET PRO
  • Market Data

Market-moving news and views, 24 hours a day >

October 19 14:00 UTC Released

USPhilly Fed Capex Index

Actual

-0.2 %

Forecast

0.1 %

Previous

0.4 %

October 19 13:00 UTC Released

RUCbank Wkly Reserves*

Actual

427 Bln USD

Forecast

Previous

423.3 Bln USD

October 20 06:00 UTC 275275m

DEProducer Prices MM

Actual

Forecast

0.1 %

Previous

0.2 %

October 20 06:00 UTC 275275m

DEProducer Prices YY

Actual

Forecast

2.9 %

Previous

2.6 %

October 20 08:00 UTC 395395m

EZPhilly Fed New Orders

Actual

Forecast

Previous

32.5 Bln EUR

October 20 08:00 UTC 395395m

BRCurrent Account NSA,EUR*

Actual

Forecast

Previous

32.5 Bln EUR

October 20 08:00 UTC 395395m

BRCurrent Account SA, EUR*

Actual

Forecast

Previous

25.1 Bln EUR

October 20 08:00 UTC 395395m

EZCurrent Account SA, EUR*

Actual

Forecast

Previous

25.1 Bln EUR

October 20 08:30 UTC 425425m

GBPSNB Ex Banks GBP

Actual

Forecast

6.500 Bln GBP

Previous

5.669 Bln GBP

October 20 08:30 UTC 425425m

GBPSNB, MM GBP

Actual

Forecast

Previous

5.093 Bln GBP

Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.