LNG

JERA Co. Inc, Japan’s biggest liquefied natural gas importer and utility company, has signed an accord with a unit of Indonesia’s state-owned power supplier PT PLN (Persero) to cooperate on LNG supplies for Indonesian domestic use.

The Asia-Pacific region is expected to have gradually increasing liquefied natural gas demand, driven by the region's economic recovery and new regasification facilities coming online.

The Panama Canal Authority said that the queue of vessels waiting to transit has dropped by 20 percent to 108 in the first week of September at both entrances to the waterway compared with 135 ships waiting in line last week.

European Union liquefied natural gas and pipeline gas prices dropped 14 percent as mild weather and the highest weekly EU storage build of 2023 saw Germany and Italy filled by over 70 percent while Asian spot LNG prices declined as well, though at a slower rate.

Osaka Gas, a leading Japanese LNG importer, reported a 43 percent increase in consolidated net sales for the fiscal year to the end of March 2023, mainly due to higher prices for city-gas in Japan, though profits fell year-on-year because of the shut-down of Freeport LNG in Texas for most of the year from June and the higher cost of replacement cargoes.

Osaka Gas, which is part of the Daigas Group, increased annual sales to 2.27 trillion yen ($16.8 billion), up from 1.59 trillion yen ($11.8Bln) in the previous fiscal year.

The utility’s gross annual profits dropped to 282.2 billion yen ($2.09Bln) from 314.2Bln yen ($2.33Bln) in the 2021-2022 fiscal year.

Ordinary profits declined by 33.5 percent on the year to $74.65Bln yen ($560.8M) versus 113.52Bln yen ($841.5M) in the previous fiscal year.

“This was primarily due to the higher unit selling price of city gas under the fuel cost-adjustment system and an increase in sales from a rise in LNG prices and in the Domestic Energy Business and an increase in sales from the upstream project in the USA and Australia in the International Energy Business,” said Osaka Gas.

Negative impact

“In the Domestic Energy Business, although the negative impact of the time lag between fluctuations in raw material costs and their reflection in the unit selling prices diminished compared with the previous fiscal year, costs for LNG procurement increased,” the company explained.

Osaka Gas added that its number of consolidated subsidiaries was currently 154, with nine subsidiaries added and five removed since the fiscal year ended.

In its explanation of reduced profits from Freeport LNG, Osaka Gas noted that a fire broke out at the liquefaction plant of the Freeport LNG project, one of the Daigas Group’s investments and LNG sources.

“In response to the shutdown, we prepared to secure replacement LNG for the volumes the Group originally planned to procure from the project during the shutdown period and arranged modification regarding the contracts related to LNG procurement from the Freeport Project. The Project restarted operations at the plant in February of this year,” said Osaka Gas.

Global volumes

Osaka gas also has booked volumes from other global projects such as Oman LNG in the Arabian Peninsula, Gorgon LNG in Western Australia, the nearby Northwest Shelf Project and the Bintulu LNG plant in Malaysia.

Other Osaka Gas suppliers include Papua New Guinea LNG and the Sakhalin export plant in the Russian Far East.

In its future earnings forecast to March 2024, the utility said that consolidated ordinary profit was expected to increase by 83.3Bln yen ($607M) year-on-year to 159.0Bln yen ($1.78Bln) with Freeport back on stream.

“This is primarily due to an increase in profit in reaction to the absence of costs and losses associated with the Freeport fire in this fiscal year,” said Osaka Gas.

Jan 26 (LNGJ) - Hokkaido Electric Power Co., the Japanese utility that receives cargoes from the US including Freeport LNG in Texas before the June closure, said nine-month power sales increased by more than 41 percent to 623.8 billion Japanese yen ($4.8Bln).

   However, the company said it posted a net loss in the fiscal year to December and planned to increase electricity prices by at least 32 percent from June. The utility, which imports LNG volumes at the Ishikari import terminal, swung to a nine-month loss of 21Bln yen ($161.1 million) as fuel prices for power generation rose.

Inpex Corp, the Japanese oil and gas company and operator of the Ichthys LNG plant in Australia’s Northern Territory, is finalizing its revised development plan for the Abadi LNG export project in Indonesia to include carbon-capture facilities.

JERA Co. Inc, Japan’s largest buyer of liquefied natural gas, has decided to resume operations in mid-April at the 47-year-old Sodegaura Thermal Power Station Unit 1, which uses regasified LNG and had been under a long-term planned shutdown process.