LNG

Japanese liquefied natural gas imports decreased for a second month in 2024 by almost 6 percent as milder winter weather and higher storage levels reduced cargo needs especially of more expensive spot shipments even at much lower prices.

Japanese liquefied natural gas imports increased for a fourth straight month while prices jumped almost 90 percent year-on-year, though imports of thermal coal surpassed LNG, surging 34.5 percent last month to meet higher power demands.

The August 2021 LNG shipments amounted to 6.29MT, or around 90 cargoes, which was 7.8 percent higher than the 5.8MT received in August 2020, according to the preliminary trade figures from Japan's Ministry of Finance.

The July deliveries had amounted to 6.18MT, up 2.5 percent from the 6.03MT received in July 2020.

Japan’s shipments in August cost 363.01 billion yen ($3.31Bln), a rise of 89.3 percent on the 191.76Bln ($1.75Bln) spent in August 2020, though for fewer cargoes.

LNG competes mainly with thermal coal for power generation in Japan and the shipments of coal increased by 34.5 percent year-on-year in August to 10.6MT.

Japan’s thermal coal imports in July 2021 were also high at 9.81MT, up 10.90 percent on the same month in 2020.

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.

Just nine of these reactors are currently on line at six plants.

LNG cargo deliveries to Japan during August 2021 from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei rose by 18.5 percent to 1.46MT compared with August 2020.

Middle East shipments from countries like Qatar and Oman were 25.2 percent up year-on-year at 1.25MT.

However, shipments from Russia last month fell 75.7 percent to 144,000 tonnes because of maintenance work at the Sakhalin Island plant in the Russian Far East.

US cargo deliveries to Japan almost doubled year-on-year to 541,000 tonnes, though were less than the previous month's total of 611,000 tonnes.

The balance of imports in August 2021 came from Australia, African nations and the spot market.

That segment of the imports was higher than the previous month at 2.89MT versus last month’s 2.48MT and the deliveries were also above the 2.74MT received in August 2020.

Annual LNG deliveries to the Japanese import network of 37 facilities came to 74.46MT in 2020, down 3.7 percent compared with the 77.32MT received in 2019.

Imports by the world’s largest buyer of LNG have continued to drop in recent years and in 2021 the Japanese total will be overtaken by China.

Japan's 2019 import total of 77.32MT was 6.7 percent lower than the 82.85MT logged in 2018.  

Japanese liquefied natural gas imports dropped for the sixth months out of the past seven as the nation received fewer shipments from the Middle East and Asia leading to a drop in its energy spending bill on fuels such as LNG and coal.

Shipments of LNG to Japan fell 13.1 percent in May to 5.56 million tonnes compared with 6.40MT in May 2018, according to preliminary figures from the Ministry of Finance.

Imports of the fuel had edged 0.3 percent higher in April to 5.62MT from 5.60Mt in April 2018 after dropping for the previous five straight months.

Imports of thermal coal, a competitor to LNG, also declined by 9.40 percent in May to 7.95MT.

Seven of Japan's nuclear power plants, which numbered 54 on line before the Fukushima disaster in 2011, were operating in May versus nine in the previous month.

The April 2019 rise in LNG deliveries to Japan had been 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 February 2019, imports dropped as the Japanese followed fuel-saving measures and the government encouraged a drop in costly LNG imports, with coal-fired power often filling the gap.

The cost of the May 2019 cargoes came to 302.17 billion yen ($2.79Bln), a decrease of 13.7 percent from the 350.33Bln yen ($3.23Bln) the cargoes cost in the same month a year ago.

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

The Ministry’s data for May showed a plunge in imports from the Middle East region for a second successive month to their lowest level since around 2005.

The May 2019 shipments from countries like Qatar, the United Arab Emirates and Oman totaled 793,000 tonnes, down 44.8 percent on May 2018 and less than the 945,000 tonnes received in April 2019.

Analysts said the fall suggests continued plant maintenance work in the region at a time when there was also an 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 also edged lower by 3.2 percent to 1.37MT from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei.

US volumes received also dropped to 130,000 tonnes versus 138,000 tonnes in April 2019, 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 534,000 tonnes, a rise of 12.2 percent versus the same month in 2018.

The balance of imports from Australia, African nations and the spot market amounted to 2.73MT, higher than the 2.66MT imported in April 2019.

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).