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Australia Safeguard Mechanism Could Lead to Diversified Japan LNG Supply

LNG

Japan is finding an increased need to diversify its sources of LNG imports highlighted by possible higher prices from Australia.

  • Japan currently sources more than 40% of its LNG from Australia but the introduction of Australia's Safeguard Mechanism from 1 Jul could affect cost scenarios for investment and lead to higher prices according to S&P Global.
  • More than 24m mt/year of long-term Australian LNG supply contracts with Japan are due to expire by 2039 with more than 8m mt/year currently set to expire by 2029.
  • Japan is looking to LNG supplies from Qatar and the UAE according to a S&P Global source.


Source: S&P Global

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