LNG

Russian natural gas company Novatek has plans to start commercial shipments from the Arctic LNG II project in mid-January 2024 and would likely send three to five cargoes per month eastwards to the Asian market, including China, while Russia’s Sakhalin LNG plant in the Far East has re-started after scheduled maintenance.

Japanese monthly LNG imports dropped by 5.4 percent year-on-year as costs increased by more than 50 percent and with the number of shipments from Asian nations and Australia rising as deliveries from other regions fell.

The November 2022 LNG shipments to Japan’s network of 37 terminals amounted to 5.55MT, or 82 cargoes, compared with 5.86MT, or 87 shipments, in November 2021, according to preliminary trade data from the Finance Ministry.

The deliveries last month were, however, higher than those in the previous month of October 2022 when they were 5.08MT.

Those October shipments had been higher by 9.9 percent than the October 2021 deliveries received.

The costs of the November LNG cargoes increased by 52 percent year-on-year to 750.52 billion yen ($5.48Bln) compared with the November 2021 costs of 494.77Bln yen ($3.61Bln), the Ministry data showed.

For the past six months, Japan has seen a record trade deficit for each month, as rising energy and raw material costs have pressured the economy.

While LNG imports fell in November deliveries of thermal coal for power generation also plummeted by 18.5 percent to 8.58MT.

The top eight suppliers of LNG to Japan have most recently been Australia with more than one-third of deliveries, Malaysia, Qatar, Russia, the US, Brunei and Papua New Guinea.

Cargo sources

The November shipments from Russia’s Sakhalin Island plant in the Far East fell 14.4 percent to 446,000 tonnes while deliveries from the US dropped by 52.2 percent versus November 2021 to 191,000 tonnes.

Shipments of LNG from Asia in November increased by 5 percent to 1.62MT.

The Ministry data also showed that Middle East deliveries were the biggest fallers by 54.2 percent to 484,000 tonnes.

The balance of imports and the biggest portion in November 2021 came from Australia with minor additions from African nations and the spot market.

That segment of the imports was well up at 2.81MT compared with 2.34MT in November 2021, though was less than the October 2022 combined import figure of 3.03MT.

Japan has also lagged in increasing nuclear power into the energy mix in 2022.

Since the Fukushima disaster, only 10 reactors have been given the go-ahead to go back into operation compared with the 54 that were online in 2011 and which supplied around 30 percent of Japan’s energy needs.

A further 21 reactors have been decommissioned since 2011 and will never be re-started. 

Russian liquefied natural gas production has risen in 2022 while overall natural gas production by Gazprom and other companies has dropped because of Russian gas cut-offs in retaliation for US and European Union-led sanctions imposed for the invasion of Ukraine.

Japanese liquefied natural gas imports for the first six months of the current fiscal year rose by 4 percent and with deliveries from the Russian Far East Sakhalin liquefaction plant increasing year-on-year and costing 90 percent more than the previous year as more Atlantic Basin shipments pointed at Europe.

Dynagas LNG Partners, the owner of six LNG carriers and with five of them ice-class, has given an upbeat assessment of the cargo market and shipping developments from the safe point of view of all its vessels being on long-term charters.