LNG

Tokyo Gas, the Japanese LNG importer and city-gas operator, said 20,000 of its employees joined with other companies in downtown Tokyo to take part a successful day-long training drill assuming a large-scale future earthquake in the Tokyo metropolitan area.

“We carried out a comprehensive disaster prevention drill and such comprehensive drills have been conducted since 1983 with the aim of strengthening the disaster response capabilities of the Tokyo Gas Group,” said the company.

“In addition to about 20,000 employees of the Tokyo Gas Group, there was also cooperation with other Tokyo bodies, including the Metropolitan Police Department, the Metropolitan Expressway Company and Nippon Telegraph and Telephone (NTT) East Corp,” explained Tokyo Gas.

The statement said that close cooperation also ensued between Tokyo Gas and Tokyo Electric Power Grid Inc. and TEPCO Energy Partners and related organizations and other infrastructure companies.

The exercise was carried out imagining an earthquake with a maximum seismic intensity of 7 occurring in the southern part of the downtown area during daytime on a weekday in July and issues such as gas supply suspension had to be coped with.

Information flow

“We confirmed and verified the disaster response. During the training, we also carried out information linkage using the Tokyo Disaster Information System,” stated Tokyo Gas.

“This training focused on the ‘initial stage’ from the occurrence of the earthquake to about 24 hours after the earthquake, which enhances the resilience to disasters, and was conducted as a ‘blind type training’ without preparing scenarios in advance,” added the company.

The exercise included coping with various time scenarios and Tokyo Gas employees confirmed and verified how to be on alert for aftershocks and how to respond to continuous severe related incidents.

The company declared that the Tokyo Gas Group would continue to take measures against disasters such as earthquakes and work to realize a strong and safe energy supply for Japan.

Japan operates 37 separate LNG import terminals and Tokyo Gas imports around 13 million tonnes per annum of LNG.

An earthquake took place offshore eastern Japan on 11 March 2011 and became known as the Great East Japan Earthquake and Tsunami.

Around 20,000 people died in that disaster which also damaged the Fukushima nuclear plant and set in motion profound changes in the nation’s energy outlook.

It also led to Tokyo Electric Power Co. and Chubu Electric Power, the two largest users and importers of LNG in Japan, integrating their thermal power operations and LNG imports under joint venture company JERA Co. Inc.

Japanese liquefied natural gas imports rebounded from 2020 declines as they rose last month, though the overall trend was down as half-year imports dropped 5.7 percent, with only US shipments increasing in the first six months.

Japanese liquefied natural gas imports dropped by 8.8 percent last month and deliveries of thermal coal increased by almost the same volume as Asian and Middle East volumes plunged 30 percent year-on-year while Australian deliveries were steady.

Japanese liquefied natural gas imports dropped last month and the nation’s cargo costs fell along with lower LNG prices while thermal coal deliveries were preferred for power generation.

Japan imported 6.64 million tonnes of LNG in February 2020, down 9.6 percent from the 7.35MT received in February  2019.

The Japanese had imported 7.51MT in January 2020, down 0.5 percent from the 7.54MT received in January 2019.

The shipments cost the nation 351.42 billion yen ($3.26Bln), 24 percent lower in yen terms than the import bill for February 2019 when it was $462.22Bln yen ($4.13Bln), according to the preliminary figures from the Japanese Finance Ministry.

Thermal coal imports, a major replacement for LNG in the power sector, came to 9.14MT in February 2020, down just 1.6 percent on the 2019 figure and in line with the January 2020 shipments.

The country’s imports of LNG fell for the whole of last year to 77.32MT,  which was 6.7 percent lower than the 82.85MT of shipments that arrived in 2018.

The costs of cargoes sent to Japan amounted to 4,354 billion yen ($39.72Bln) in 2019, down 8.1 percent from the previous year.

Annual thermal coal shipments came to 111.05MT in 2019, down just 2.2 percent on the 2018 total.

Asian LNG cargo deliveries from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei amounted to 1.66MT in February 2020, down 18.7 percent on the same month a year ago.

Middle East deliveries from countries like Qatar, the United Arab Emirates and Oman came to 1.31MT, a drop of 15.1 percent.

Shipments from Russia, mostly from the Sakhalin Island plant in the Far East, amounted 597,000 tonnes, a decline of 1.1 percent on the same month last year.

US cargo deliveries to Japan continue to rise as more capacity comes on stream and came to 473,000 tonnes versus 403,000 tonnes in January 2020, and 41.2 percent higher than the 335,000 tonnes received in February 2019.

Japan will be importing a bigger proportion of low-priced US cargoes in the years ahead from booked volumes and the spot market with six US export plants now in operation.

Last year the US shipped 3.69MT to Japan, a rise of 48.2 percent on 2018.

The balance of Japan’s January imports came from Australia, African nations and the spot market and amounted to 2.60MT versus 2.83MT in February 2019 and 3.22MT in January 2020.

Japanese trading house Mitsui is emerging as a key partner in the liquefied natural gas projects being built up on the US Gulf Coast and on the Pacific Coast of Mexico by California-based utility Sempra Energy.

Japanese spot liquefied natural gas cargoes delivered in September cost $5.20 per million British thermal units less than in the same month a year ago, though just $0.60 less than in August 2019 amid an over-supplied market and tentative demand.

Japanese liquefied natural gas imports edged higher, ending declines in the past seven months out of eight, as the nation again received fewer cargoes from the Middle East and shipment costs dropped as gas was substituted by more thermal coal imports.

JERA Co Inc., the largest Japanese liquefied natural gas buyer and power assets owner, said it was overhauling its business while increasing its medium-term LNG activities with a larger carrier fleet as it aimed for 3.6 trillion yen ($33 billion) of sales in fiscal 2019.

The company said it now had volumes of LNG amounting to 35 million tonnes per annum, upstream investments in five projects and was increasing its LNG fleet from 18 vessels to 25 to ship its cargoes.

However, while LNG activities would focus on growth through 2030, after that date Japan’s needs for power generation could be different.

For its power generation arm of Tokyo Electric Power and Chubu Electric, JERA controls domestic power capacity of 67 gigawatts and a total of nine gigawatts of overseas output.

JERA said the direction was uncertain for Japan’s future power mix, though by 2030 it could have 20-22 percent nuclear power units in operation, 24-22 percent made up of renewable energy projects, 27 percent gas-fired plants supplied with regasified LNG, 26 percent coal-fired plants and 3 percent oil-fired plants.

Under the transition, Japan could replace more plants requiring LNG with renewable projects than other generating facilities, leading to a possible future decrease in LNG imports of around 14 percent after 2030.

The 2030 energy mix numbers differ significantly from the 2016 figures of 16 percent nuclear, 41 percent gas-fired plants using LNG, 33 percent coal and 10 percent oil.

“Population shrinkage and sluggish demand means that a constant growth of domestic demand for electricity can’t be expected in the future,” according to JERA.

Its figures suggest the Japanese population could drop to 93 million people by 2060 from 128 million at present.

JERA explained that its company structure would now comprise three separate departments overseeing the five main sectors of its business, fuel markets, fuel procurement, power plants, electricity sales and the domestic electricity market.

JERA said the role of its “Optimization Department” would assume greater importance in the future.

“It will be responsible for increasing profits through operational excellence in power plants and fuel terminals, as well as market trading of fuel, electricity and gas, based on the existing agreements,” said the company.

The company’s “Business Development Department” would also have a key role.

“It would increase returns by achieving the optimal asset portfolio through new installations and the replacement and restructuring of power plants,” added the company.

JERA’s “Operations & Maintenance Department” would be responsible for boosting returns by achieving high value-added services through “agile operations and cost reductions” in utilizing its infrastructure.

The company said it would use LNG and renewables to spark the transition to a clean-energy economy up to 2025.

“Through enhancing the LNG value chain and undertaking large-scale renewable energy development and constructing a complementary relationship between LNG-fired power and renewables, JERA will provide stable, economic and clean energy,” stated the company.

JERA said it would also implement “six measures” to achieve its strategy goals and to be a world leader in LNG and renewables.

“For LNG, we would maintain and expand our fuel procurement scale through replacement of domestic power plants with more efficient facilities and with expansion of generation,” it explained.

“We would leverage that scale for LNG trading expansion and upstream project participation and improve profitability along the entire value chain,” JERA added.

“For renewable energy, we would leverage our large-scale project development competence that we gained from the existing projects, promote development focusing on offshore wind power in particular, and grow it as one of the main pillars of the business in our future portfolio,” stated the company.

Spot liquefied natural gas cargoes arrived in Japan last month costing an average of $8.30 per million British thermal units, a drop of $2.20 per MMBtu compared with the previous month.

Japanese liquefied natural gas imports in October increased by 6.5 percent as shipments from the Middle East and Australia offset a drop in Asian cargoes as the nation’s monthly LNG costs also jumped more than 49 percent year-on-year on higher prices and volumes.