LNG

Japanese liquefied natural gas imports dropped by 12 percent in March even as cargo numbers remained stable from Australia and Asian nations and with thermal coal shipments falling by more than delivered LNG volumes amid ample stocks and lower demand for power generation.

The Japanese Government’s key Minister of the Economy, Trade and Industry (METI), Yasutoshi Nishimura, said he had approved a proposal to help improve the nation’s emergency access to liquefied natural gas for power generation.

Minister Nishimura said in a statement that he would allow the government agency, the Japan Oil, Gas and Metals National Corporation (JOGMEC), to fund the purchase of spot LNG if required.

“Japan also plans to revise another law to allow the government to order large users to limit use of city gas in case of an emergency,” added the Nishimura statement.

Japanese LNG buyers who are the biggest utilities have been mindful of avoiding high-cost LNG purchases, though during August 2022 monthly LNG costs rose to over the US$6 billion ( 874.47 billion yen) level for the first time.

Rising energy costs are affecting the balance of payments of countries worldwide, though Japan is particuarly affected as it has no sizeable reserves of domestic energy resources and must buy in most of its oil, gas and coal.

However, the move on LNG supplies signals that there are limits to cutting off energy shipments as the Northern Hemisphere winter approaches.

Deliveries of LNG to Japan’s network of 37 terminals have amounted over the past few months to around 6.25 million tonnes, or amount 93 cargoes, according to trade figures from the Japanese Ministry of Finance.

Cargo competition

Even in the past week deliveries of LNG will slip as it lags North Asian LNG users China and South Korea in cargo numbers.

Shipping data shows that Chinese terminals are set to receive about 23 shipments in the week through October 16 compared with 18 bound for delivery to Korea and 14 shipments going to Japan.

Among JOGMEC’s traditional role is to help Japanese companies make equity investment in overseas energy projects as part of Japan’s focus on securing long-term oil and gas and other fuels and to make investments itself in important projects.

JOGMEC has also revised its statutes to investment in new and cleaner fuel ventures rather than just hydrocarbons and to raise its profile in sectors such as carbon-capture and storage.

Just last week, on October 8, JOGMEC agreed to collaborate with the Saudi Arabian Oil Company on upstream fuel ventures.

Hosono Tetsuhiro, Chairman and Chief Executive of JOGMEC, and Mohammed Al-Qahtani, Senior Vice President of Downstream at Saudi Aramco, signed the accord.

“JOGMEC intends to proactively support the implementation and/or provision of risk money, equity capital and liability guarantees, for a specific project in the Kingdom of Saudi Arabia related to the production and/or storage of hydrogen and ammonia, which are our new support areas under the revised JOGMEC law promulgated on May 20,” the agency explained.

Japanese liquefied natural gas imports fell again in November as Asian and Middle East deliveries dropped and were offset by more cargoes from Australia as the nation headed for an annual fall in LNG imports to under 73 million tonnes as overall power use declined in the economic slowdown.

Japanese liquefied natural gas imports fell again last month after a brief rebound the previous month as Asian and US deliveries dropped, offset by more cargoes from nations like Qatar and Australia, while thermal coal was preferred to LNG.

Japanese liquefied natural gas imports increased last month after falling in the previous two months with Asian nations and Australia providing more supplies at prices down 44 percent from a year ago.

Japanese liquefied natural gas imports dropped for a second month with year-on-year declines in Australian and US shipments while cargo volumes from Asia, the Middle East and Russia all rose.

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.

The Japanese Finance Ministry has provided official confirmation that liquefied natural gas imports dropped in 2019 with only Australian and US and spot cargo numbers improving, while in December LNG shipments declined as thermal coal imports surged.

Japanese liquefied natural gas imports edged higher by 0.3 percent in April after previously dropping for five straight months as LNG shipments from the Middle East plunged to a 14-year seasonal low and the nation’s energy demand slowed on the nuclear and thermal coal fronts.

Japan received 5.62 million tonnes of LNG in April compared with 5.60MT in the same month of 2018, according to preliminary figures from the Ministry of Finance.

Imports of thermal coal, a competitor to LNG, also declined by 2.5 percent to 8.5MT.

Nine of Japan's nuclear power plants, which numbered 54 on line before the Fukushima disaster in 2011, had re-started in April, though only seven are now operating.

LNG Cargoes delivered to Japan in March 2019 had amounted to 7.29MT compared with 7.93MT in March 2018, a fall of 8.1 percent.

The April 2019 rise in LNG deliveries to Japan was the first since October 2018 when 6.53MT was received, a 6.5 rise on the previous October.

Even during the peak winter months from November 2018 through January 2019, imports dropped as the Japanese followed fuel-saving measures and the government encouraged a drop in costly LNG imports.

The cost of the April 2019 cargoes came to 313.5 billion yen ($2.83Bln), a rise of 5.8 percent from the 296.2Bln yen ($2.68Bln) the cargoes cost in the same month a year ago.

For balance of payments purposes, Japan has been trying for a number of years to bring LNG import costs under control.

The Ministry’s data for April showed a plunge in imports from the Middle East region, to their lowest level since April 2005.

The April 2019 shipments from countries like Qatar, the United Arab Emirates and Oman totaled 945,000 tonnes versus 1.23MT in April 2018, a drop of 23.5 percent, suggesting plant maintenance work in the region at a time when there was also a reported outage of the Qatar-UAE Dolphin Energy natural gas pipeline.

The last time monthly shipments from the Middle East dropped under the 1MT level was in 2005 when they regularly totaled between 950,000 to 970,000 tonnes in the second quarter of the year.

Asian LNG shipments cargo deliveries increased by 12.4 percent to 1.47MT from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei.

US deliveries amounted to 138,000 tonnes, the equivalent of two large cargoes while one delivery was received in the same month a year ago.

Monthly Russian shipments from the Sakhalin Island plant in the Far East amounted to 404,000 tonnes, a fall of 13.9 percent versus 2018.

The balance of imports from Australia, African nations and the spot market amounted to 2.66MT, a 32 percent rise compared with the 2.02MT received in April 2018.

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). The Japanese had paid 19.3 percent more in 2017 compared with the previous year with an LNG bill of 3,915Bln yen ($35.58Bln).