LNG

The US Freeport LNG export plant on Quintana Island in Texas has announced scheduled shut-downs of its liquefaction Trains for repairs and maintenance and de-bottlenecking to  boost output in the future.

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 declined last month by 0.4 percent, the same amount as the previous month, with shipments increasing from Australia, Russia and the spot market while monthly costs rose to over $6 billion for the first time.

Japanese liquefied natural gas imports declined last month by 0.4 percent after three successive increases and year-on-year costs more than doubled as volumes increased from Asia and Australia.

Shipments of LNG to Japan’s network of 37 terminals amounted to 6.16 million tonnes in July 2022, or 92 cargoes, compared with 6.19MT, or 91 cargoes, in July 2021, according to the preliminary trade figures from the Japanese Ministry of Finance.

Japan had imported 5.80MT in June 2022 compared with 5.70MT in the same month of 2021.

The nation’s LNG costs in July 2022 amounted to 773.1 billion yen ($5.65Bln), a more that 124 percent increase compared with the 344.99 Bln yen ($2.52Bln) paid in June 2021.

Weaker yen

The effect on Japan’s balance of payments was severe in June as the Japanese yen dropped to a 24-year low against the dollar, though it recovered in late July and August, though dollar-based commodities like energy are still more expensive when converted back into yen.

Japan’s 2021 LNG cargo deliveries had been less than those of China for the first time and came to 74.31MT, down 0.2 percent on 2020 and 4.62MT less that the Chinese total for 2021.

Japanese thermal coal shipments also fell in July to 9.36MT, down by 4.1 percent from July 2021.

The price of thermal coal deliveries jumped higher to 408.46Bln yen ($2.98Bln), up 262.4 percent from July 2021.

During July the volumes of delivered LNG increased from Asia and Australia compared with last year.

Shipments of LNG to Japan in July increased by 19.6 percent to 1.73MT from Asian countries like Malaysia and Indonesia.

Middle East cargo deliveries from nations like Qatar were down by 54.7 percent last month to 401,000 tonnes.

Deliveries from the US increased by 8.9 percent from July 2021 to 665,000 tonnes.

This was higher than the 562,000 imported in July from the Russian LNG plant on Sakhalin Island, which were down 26.1 percent from July 2021.

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

That segment of the imports was higher at 2.80MT compared with the 2.48MT logged in July 2021.

Nuclear

As of the start of July 2022, 10 nuclear reactors at six power stations have been given the go-ahead to restart in Japan but only four reactors were in operation.

Several Japanese Prefectures have agreed to restart the reactors, though were awaiting the implementation of safety measures and the completion of other construction work.

Before the Fukushima disaster in 2011, 54 nuclear reactors were in operation in Japan, supplying about 30 percent of the country’s electric power.

The 10 reactors with start-up approvals are at the following six power stations: Ōi, Takahama, and Mihama (Kansai Electric), Genkai and Sendai (Kyushu Electric) and Ikata (Shikoku Electric).

These plants based in western Japan all use pressurized water reactors, which are different from the boiling water reactors at the Fukushima plant than exploded after an earthquake and tsunami.

Japanese liquefied natural gas imports increased for a second successive month in May as they rose by 16.3 percent and Russian deliveries were twice as much as those from the US.

Shipments of LNG to Japan amounted to 5.76 million tonnes last month, or 85 cargoes, compared with 4.95MT, or 73 cargoes, in May 2021, according to the preliminary trade figures from the Japanese Ministry of Finance.

Japanese LNG deliveries to the network of 37 terminals around the main islands had been 5.57MT in April, or 82 cargoes, compared with 4.97MT, or 73 cargoes, in April 2021.

LNG costs for the nation last month surged year-on-year by 155 percent to 601.40Bln yen ($4.47Bln) compared with 236.15 Bln yen ($1.76Bln) in May 2021.

Yen plunge

The effect on the balance of payments was even more severe as the Japanese yen has dropped to a 24-year low against the dollar, meaning dollar-based commodities like energy are more expensive when converted back into yen.

The country lost the No. 1 LNG import position in 2021 to China, though in certain weeks in May and June Japan has been the biggest North Asia importer as China reduced shipments amid Covid-19 lockdowns.

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

Japan’s 2021 cargo deliveries were 74.31MT, down 0.2 percent on 2020 and 4.62MT less that the Chinese total for 2021.

Thermal coal shipments also increased in May to 8.54MT at the nation’s coal terminals, a rise of 7.1 percent year-on-year.

On a fiscal year basis, Japanese LNG imports had dropped in the April 2021 to March 2022 period by 6.4 percent to 71.46MT versus 76.35Mt in the previous fiscal year, according to Ministry statistics.

Russian deliveries

During May 2022 shipments of LNG from Russia declined by 5.4 percent to 559,000 tonnes, though were higher than April’s 396,000 tonnes of deliveries. The shipments come frm the Gazprom-run Sakhalin plant in the Russian Far East.

They were also more than double the amount of shipments imported from the US, which dropped by more than 51 percent to 267,000 tonnes.

Imports from the US had dropped in April by 12 percent to 344,000 tonnes as the Russian invasion caused Asia-bound shipments to be re-directed to Europe.

Middle East cargo deliveries from nations like Qatar were down by 16 percent last month to 545,000 tonnes.

Shipments of LNG to Japan in May from Asian countries surged by 56.7 percent to 1.36MT, though were down on the 1.49MT received in April 2022.

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

That segment of the imports was higher at 3.03MT versus the 2.30MT received in May 2021 and up on the 2.95MT delivered in April.

Thermal coal shipments to Japanese ports in the fiscal year to the end of March 2022 had increased by 8.8 percent to 114.46MT, outpacing the LNG volumes of 71.46MT during the same period.

The almost parity levels between thermal coal imports and LNG shipments disappeared in 2021 with thermal coal deliveries moving well ahead.

Nuclear power generation in Japan is still well down. Nine reactors from a total of 16 plants with 50-plus reactors are operating from those that have gained the regulatory safety agreements.

Japanese liquefied natural gas imports plunged almost 12 percent last month as cargoes from Australia maintained momentum and those from other regions dropped  with the biggest faller being US shipments.

Japanese LNG imports in February 2022 amounted to 7.10 million tonnes, or 104 cargoes, compared with 8.07MT, or 118 shipments, in February 2021 2021, according to the preliminary trade figures from Japan's Ministry of Finance.

Deliveries of LNG to Japan in January 2022 had tumbled by 15.8 percent to 6.78MT, just under 100 cargoes, compared with 8.06MT in January 2021.

The cargoes received in February cost 676.22 billion yen ($5.72Bln), which was 65.3 percent more than in February 2021 when the costs were 409.06Bln yen ($3.46Bln).

The recent changes in Japan’s LNG delivery system came after the nation formally ceded the No. 1 LNG import position in 2021 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 February 2022 from Asian countries dropped by 5.9 percent year-on-year to 1.83MT.

Middle East cargo deliveries from nations like Qatar were also much lower, down 28.9 percent to 854,000 tonnes.

US cargoes drop

LNG imports from the US plunged by the largest margin of all countries of 56.6 percent year-on-year in February 2022 to 411,000 tonnes and were well down on the 651,000 tonnes delivered in January 2022.

The balance of imports in February 2022 came from Australia, African nations and the spot market and amounted to 3.35MT, which was higher than the 3.24MT received in February 2021 and the 3.12MT logged in the previous month.

The February 2022 trade data showed that Japanese imports of thermal coal fell by less than LNG shipments.

Thermal coal imports in February declined by 3.2 percent to 9.51MT as the Asian Northern Hemisphere enjoyed milder weather after coal shipments also fell just 1.3 percent in January to 10.54MT.

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 a handful of plants with nine reactors from a total of 16 plants with 50-plus reactors having gained the agreement to resume operations. 

Japanese liquefied natural gas imports dropped almost 9 percent in December as the nation formally ceded the No. 1 spot to China as the top LNG importer for 2021, while Japan’s LNG shipments from the US jumped nearly 50 percent.

Japanese liquefied natural gas imports plunged almost 17 percent as the nation directly replaced gas-fired power with cheaper thermal coal as LNG prices surged worldwide.

Japan’s liquefied natural gas imports jumped for a second month and also rose for the first half of the year with higher volumes from the US and Russia, though shipments to Japanese terminals were well down on those to China.

Japan’s liquefied natural gas imports declined last month for a second month with drops in volumes from the Middle East, Australia and the spot market being partly offset by deliveries from Asian neighbours, Russia and the US.