LNG

JERA Co. Inc., Japan’s biggest liquefied natural gas importer and utility company, reported an increase in fiscal full-year profits while revenues plunged nearly 22 percent because of a decrease in electric power sales.

JERA Co. Inc, Japan’s biggest liquefied natural gas importer and utility company, said it expected the LNG demand-supply imbalance to be less serious this winter season than last because the forecast milder weather, the high storage held in Europe and the delayed resurgence of the economy in China.

JERA, which buys around 35 million tonnes per annum of LNG and is Japan’s biggest fossil-fuel electricity generator being owned jointly by Tokyo Electric Power and Chubu Electric, the two largest power companies, gave the LNG market forecast in a company earnings presentation

The presentation in Tokyo was led by JERA President and Chief Executive Hisahide Okuda.

JERA, which currently oversees the operations and provides fuel for a total of 26 power plants in Japan and imports LNG into 11 of Japan’s network of 37 terminals, said the only issue to be concerned with was that of the unexpected.

Potential issues

“Since overall global supply has not grown, there is the potential for LNG production issues on the supply side - a problem at any LNG plant could cause prices to jump. We believe, therefore, that the environment for LNG procurement remains unpredictable,” Okuda explained.

“Turning to LNG fundamentals, although demand for LNG is growing, particularly in Europe, LNG supply is not expected to catch up to that demand until around 2025, leading to a tight supply-and-demand situation,” the CEO said.

“However, at JERA, in addition to building an LNG portfolio that combines long-term, short-term, and spot contracts, we also secure a stable fuel supply by flexibly optimizing procurement and resale through JERA Global Markets,” Okuda added.

He noted that the company was also following the “Strategic Buffer LNG (SBL)” plan proposed by the Ministry of Economy, Trade, and Industry (METI) whereby at least one LNG carrier-load of surplus LNG per month between December and February can be supplied to any domestic operators as determined by METI.

According to METI and its Policy Subcommittee on Electricity and Gas, Japan will have a winter’s reserve margin exceeding the 3 percent minimum necessary to ensure stable supply.

“JERA, however, is taking nothing for granted. We will be doing our utmost to secure both kilowatts and kilowatt hours in order to ensure stable power supply,” CEO Okuda stated.

Older plants

“JERA is moving steadily forward in replacing older thermal power plants with state-of-the-art facilities. Six units, totaling 4.32 million kilowatts, whose replacement has already been completed, have begun commercial operation,” he added.

The CEO declared that looking to 2024, JERA would continue moving forward with an additional 2.99 million kilowatts in power plant replacement.

“We believe that moving decisively in this way to upgrade power sources is an important part of ensuring safety,” Okuda said.

In addition, given the smooth progress of trial operations at Yokosuka Thermal Power coal-fired power plant’s Unit 2, we will be moving its start of commercial operation forward from February 2024 to December 2023, which will also contribute to this winter’s supply capacity,” the CEO said.

The Yokosuka coal-fired plant is described by JERA as a “high-efficiency coal-fired power station that uses an ultra-supercritical (USC) power generation” system.

“Its generating capacity of 650 megawatts will contribute to a stable electricity supply,” Okuda added.

The JERA CEO said that the company was also moving forward with carbon-capture and storage projects in Asia.

JERA is carrying out joint research with Japanese LNG and energy engineers JGC Holdings Corp. and the Indonesian state electricity company Perusahaan Listrik Negara (PLN) on a project to introduce and commercialise CCS for thermal power.

“With these projects and others, we are collaborating on decarbonisation with a growing number of Asian countries including Bangladesh, Thailand, Malaysia, the Philippines, Vietnam, Indonesia and Singapore,” Okuda said.

JERA Co. Inc., Japan’s biggest liquefied natural gas importer and utility company, reported an almost 8 percent increase in quarterly revenues and a swing to profit compared with a loss in the same three months of last year.

Japan’s biggest liquefied natural gas importer, JERA Co. Inc., has named James Tinsley as Chief Commercial Officer of the JERA Americas subsidiary based in Houston in Texas as the Japanese company also hinted at US expansion moves.

JERA Co. Inc., the largest Japanese importer of LNG, had to cope with an emergency on March 27 after sulfuric acid starting leaking from the pipes of a wastewater treatment facility at the Hirono Thermal Power Station in Fukushima Prefecture in the region where the nuclear disaster and tsunami occurred 12 years ago.

JERA Co. Inc. of Japan, the largest corporate LNG buyer in the world, reported a loss in the fiscal third-quarter because of higher fuel procurement costs even as revenues more than doubled during the three months.

JERA Co. Inc., the largest Japanese LNG importer, has resumed operations at the gas-fired Anegasaki Thermal Power Station located on the eastern side of Tokyo Bay and currently under a long-term planned shutdown scheduled for February 2023.

JERA explained that that Unit 5 facility at the station was scheduled to resume operations on October 24 to supply auxiliary steam for the restart of Unit 6 at the Anegasaki power plant.

“Because the Unit had deteriorated over time and its utilization rate had declined, the Unit has been in a long-term planned shutdown since April 2021,” said JERA.

However, discussions at the Ministry of Economy, Trade, and Industry's electricity and gas policy committee led to an agreement for a re-start to help underpin Japan’s energy security.

“JERA has lifted the Unit’s long-term planned shutdown and will operate it as part of measures to provide additional power supply capacity for this winter,” added JERA.

The utility company added that it would “make every effort” in cooperation with related parties to ensure a stable supply of energy to the plant and at other power facilities.

The 600-megawatts Anegasaki plant is a conventional gas plant and in operation using LNG as fuel since 1979.

The decision to shut the plant was taken in April 2021 before the current energy crisis deepened with the Russian invasion of Ukraine.

JERA is the largest corporate LNG buyer in the world with annual volumes of around 35 million tonnes and controls a fleet of around 20 LNG carriers.

Additionally, it is Japan’s biggest fossil-fuel generator being owned jointly by Tokyo Electric Power Co. and Chubu Electric, the two largest power companies.

The company currently operates and provides fuel for a total of 26 power plants in Japan and imports LNG into 11 of Japan’s network of 37 terminals.

Japan Oil, Gas and Metals National Corp. (Jogmec), the agency helping secure a stable supply of oil and natural gas and other resources, has just published the results of two surveys on the volume of LNG handled by Japanese companies and the current status of destination restrictions in LNG sales and purchase agreements.

Jogmec was set up by the Tokyo Government in 2004 and has the full cooperation of all Japanese companies engaged in LNG.

The agency said that the latest surveys were aimed at “improving the flexibility and liquidity” of the LNG market to enhance energy security.

The survey on the “LNG Handling Volumes of Japanese Companies” revealed that they handled around 110 million tonnes of LNG in the fiscal year 2021.

The second survey on the “Destination Clauses and Price Indices in LNG SPAs” showed that the contract quantity with destination restrictions were improving for 10-year contracts through 2030.

“About 45 million tonnes, or 53 percent of the total, in the fiscal year 2021, had destination clauses compared with 21 million tonnes, or 43 percent of the total, in the fiscal years through to 2030,” said Jogmec.

LNG handled

“The LNG volumes handled by Japanese companies last year came to 109.57MT, showing a slight decrease of 0.73MT from the previous year. However, the Japanese companies have continuously achieved 100MT since fiscal 2019,” said the report.

Jogmec also noted that the FY2019 and FY2020 actual figures had been revised in this latest survey due to corrections of reports from the surveyed companies.

LNG imports in FY2021 totaled 71.46MT, a decrease of 4.9MT from the previous year, while the volume of the “external trade” increased by 4.17MT to 38.11MT, resulting in the LNG handling volume in FY2021 being at almost the same level as in FY2020.

The second survey looked at 10-year contracts from FY2021 through FY2030 and based on the annual contract quantity (ACQ).

The ACQ of the fixed-term SPAs concluded by Japanese companies was approximately 84MT in FY2021 and will amount to 49MT through FY2030.

As of FY2021, the ACQ for Delivered Ex-Ship (DES) and free-on-board (FOB) terms and their respective shares were approximately 50MT, or 59 percent, for DES terms and 34MT, or 41 percent, for FOB terms.

“As of FY2030, as the ACQ declines, the ACQ for DES and FOB terms is also to decrease to approximately 25MT and 24MT respectively,” said Jogmec.

JERA Co. Inc., the largest Japanese LNG importer and power utility operator, said fiscal first-quarter operating revenues from April through June 2022 more than doubled because of soaring sales by fuel trading subsidiary JERA Global Markets (JERAGM) as well as a year-on-year increase in electricity sales.

JERA Co. Inc, Japan’s largest buyer of liquefied natural gas, has successfully bid in a public auction conducted by general electricity transmission and distribution companies to supply additional power to the nation for July and August, including from two reprieved gas-fired power stations built in the 1970s for regasified LNG.