LNG

Japanese liquefied natural gas imports tumbled 15.8 percent last month and cargoes from Russia surpassed those from the Middle East while shipments from US export plants dropped.

Japanese LNG imports in January 2022 amounted to 6.78 million tonnes, just under 100 cargoes, compared with 8.06MT, or 118 shipments, in January 2021, according to the preliminary trade figures from Japan's Ministry of Finance.

Imports of LNG to Japan in December had declined by 9 percent to 7.03MT compared with 7.72MT in December 2020.

The cargoes received in January cost 556.63 billion yen ($4.81Bln), which was over 50 percent more than in January 2021 when the costs were 365.84Bln ($3.16Bln).

The restructuring of Japan’s LNG deliveries came after the nation formally ceded the No. 1 LNG import spot to China.

Shipments to Chinese terminals in 2021 had amounted to 78.93MT which was 18.3 percent more than in 2020.

Japan’s Finance Ministry confirmed annual cargo deliveries to Japan as 74.31MT, down 0.2 percent on 2020 and 4.62MT less that the Chinese total for 2021.

Shipments of LNG to Japan in January 2022 from Asian countries dropped by 6.9 percent year-on-year to 1.59MT.

Mideast supply down

Middle East cargo deliveries from nations like Qatar crashed by 55.6 percent versus January 2021 to 634,000 tonnes. That's as contracts ended or were re-arranged.

LNG imports from the US dropped by 31.7 percent in January to 651,000 tonnes while deliveries from Russia during the month climbed by over 41 percent to 780,000 tonnes.

The balance of imports in January 2022 came from Australia, African nations and the spot market.

That segment of the imports came mainly from Australia and amounted to 3.12MT, which was lower than the January 2021 total of 3.96MT.

The December data showed that the Japanese imports of thermal coal fell by less than LNG shipments.

Thermal coal imports in January dropped 1.3 percent year-on-year to 10.54 million tonnes.

The almost parity levels between thermal coal imports and LNG shipments disappeared in 2021 with thermal coal deliveries jumping to 112.92MT, an increase of 7.7 percent.

Nuclear power generation in Japan is still much reduced with only five plants with nine reactors from a total of 16 plants with 50-plus reactors having gained the agreement of local authorities to resume operations.

Japanese spot liquefied natural gas cargoes were contracted for Japan last month at a cost of $3.90 per million British thermal units less than in April 2018 and down $1.20 per MMBtu versus March 2019.

Japanese spot liquefied natural gas cargoes arrived in Japan last month at a cost of $1.70 per million British thermal units less than the previous month and down $3.10 per MMBtu versus March 2018.

The delivered cargoes in March 2019 had cost an average of $7.10 per MMBtu versus $8.30 per MMBtu in February 2019 and $10.20 per MMBtu in March 2018.

Shipments contracted in March 2019 had an average price of $6.40 per MMBtu compared with $7.50 per MMBtu in February 2019 and $8.80 per MMBtu in March 2018, a year-on-year drop of $2.40 per MMBtu.

The North Sea Brent crude oil price that influences Japanese long-term contract prices also impacts spot LNG and other energy markets and the price was at around $65 per barrel or more in the first quarter of 2019.

The spot cargo numbers come from the commerce division of the Japanese Ministry of Economy, Trade and Industry and are only issued if a minimum number of two trades are recorded.

The Ministry emphasizes that “spot LNG” refers to fuel traded on a cargo-to-cargo basis and does not mean shipments under contracts on a short-term, medium-term or long-term basis.

The statistical accounting of the spot prices started in March 2014.

Overall Japanese LNG imports dropped 11.4 percent in February 2019 with only Middle East volumes holding up as more coal-fired power use and nuclear generation offset the need for gas-fired power as the cost of LNG shipments also increased.

Cargoes delivered to Japan in February 2019 amounted to 7.35 million tonnes compared with 8.29MT in February 2018.

The cost of the February 2019 cargoes came to 465.54 billion yen ($4.18Bln), a rise of 8.6 percent from the 428.72Bln yen ($3.85Bln) the cargoes cost in the same month a year ago.

Japanese liquefied natural gas imports dropped by 8.7 percent in January as more coal and nuclear power generation offset the need for LNG cargoes, though the cost of the LNG rose by more than 15 percent compared with a year ago.

Shipments to Japan in January amounted to 7.54 million tonnes compared with 8.26MT in January 2018.

The December 2018 imports had amounted to 7.25MT compared with 7.95MT in December 2017.

Nine of Japan's nuclear power plants, which numbered 54 on line before the Fukushima disaster in 2011, have re-started to reduce LNG needs.

A rise in January thermal coal imports also helped offset the drop in LNG cargoes. Coal shipments rose 7 percent in January compared with the year-ago period to 10.67MT.

The cost of the January 2019 cargoes came in at 479.22 billion yen ($4.32Bln), a rise of 15.3 percent from the 416.29Bln yen ($3.75Bln) the cargoes cost in the same month a year ago.

The Ministry of Finance data for January showed that Asian LNG shipments from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei dropped 25.8 percent to 1.91MT.

Imports from the Middle East region fell 23.7 percent year-on-year, with shipments from countries like Qatar, the United Arab Emirates and Oman totalling 1.48MT in January 2019.

US shipments of LNG amounted to 267,000 tonnes, a rise of 36 percent on the same month last year.

Japan imported 2.49MT of US cargoes in 2018 and that figure will rise in 2019 as the nation will be importing more cargoes.

These will come from the Cheniere Energy-owned Sabine Pass plant in Louisiana and the Cove Point plant in Maryland operated by Dominion Energy, as well as the newest Cameron LNG plant in Louisiana set to start operations under Sempra Energy and with Japanese shareholders.

Monthly Russian shipments from the Sakhalin Island plant in the Far East declined 7.6 percent in January to 617,000 tonnes.

The balance of imports from other countries amounted to 3.26MT, with most volumes coming from Australia, backed by shipments from African nations and the spot market.

Japanese LNG imports had declined by 0.9 percent in 2018. The 2018 imports amounted to 82.85MT versus 83.63MT received in 2017.

Japan’s 2018 import bill was 20.8 percent higher than in 2017 at 4,730Bln yen ($43.14Bln), according to the Finance Ministry. Japan had paid 19.3 percent more in 2017 with an LNG bill of 3,915Bln yen ($35.58Bln).

Japanese liquefied natural gas imports rose by 4.4 percent last month compared with the year-ago period even as more nuclear power was on line as LNG cargo costs jumped by more than 28 percent and the nation opted for more thermal coal imports.