LNG

Japanese liquefied natural gas imports increased marginally in June even at higher prices, though the half-year figures showed a downward trend for 2024.

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 dropped by 10.5 percent amid milder winter weather and prices at almost 30 percent lower levels while thermal coal imports were steady and plans were revealed for another nuclear restart.

Japanese liquefied natural gas imports dropped by just over 8 percent in 2023 to a 14-year low as more nuclear, renewables and high levels of coal were used and the nation was again overtaken by China as the world’s No. 1 LNG importer.

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.

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.

JERA Co. Inc, Japan’s largest buyer of liquefied natural gas, has decided to resume operations in mid-April at the 47-year-old Sodegaura Thermal Power Station Unit 1, which uses regasified LNG and had been under a long-term planned shutdown process.

Japanese liquefied natural gas imports jumped for a third month in July with higher volumes arriving from all regions apart from the Middle East at prices over 40 percent higher than a year ago, while thermal coal shipments for power use also jumped as the nation hosted the Olympic Games.

The July 2021 LNG shipments amounted to 6.18MT, or around 90 cargoes, which was 2.5 percent higher than the 6.03MT received in July 2020, according to the trade figures from Japan's Ministry of Finance.

The June deliveries had amounted to 5.70MT, up 8.5 percent from the 5.26MT received in June 2020.

Japan’s shipments in July 2021 cost 343.62 billion yen ($3.21Bln), a rise of 42 percent on the 242.14Bln ($2.20Bln) spent in July 2020 for slightly fewer cargoes.

LNG competes mainly with thermal coal for power generation in Japan.

Japan’s thermal coal imports in July 2021 came to 9.81MT, which was 10.90 higher than the level of shipments a year ago and on June’s imports of 7.49MT of thermal coal.

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 July 2021 from nations such as Malaysia and Indonesia, Papua New Guinea and Brunei rose by 24.6 percent to 1.44MT compared with July 2020.

Middle East shipments from countries like Qatar and Oman dropped 8.8 percent year-on-year to 886,000 tonnes.

Shipments from Russia last month almost doubled to 761,000 tonnes. US cargo deliveries to Japan also jumped year-on-year but at a more modest 31 percent to 611,000 tonnes.

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

That segment of the imports was higher than the previous month at 2.48MT compared with 2.25MT in June 2021.

Annual shipments of LNG 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. The 2019 total of 77.32MT was 6.7 percent lower than the 82.85MT logged in 2018. 

US liquefied natural gas producers have seen their costs of supply increase for shipments to Asia, though the plants on the Gulf Coast and the East Coast are unlikely to repeat the 2020 cost-related shut-ins as global LNG demand has rebounded.

Japan’s liquefied natural gas imports rebounded last month with steady volumes from the Middle East and Australia and higher cargo numbers from Russia and the US, though LNG deliveries were outpaced by thermal coal shipments.