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LNG: Japan Considers Measures to Support Long Term LNG Contracts

LNG
Energy BulletsBulletPower BulletsCommodities

The Japanese government is considering measures to assist companies to enter long term LNG purchase contracts potentially of around 10 years, according to NHK cited by Reuters.

  • The measures, including financial support for securing storage and creating a framework for the resale of excess supplies, are to ensure a stable supply of fuel.
  • LNG remains a crucial fuel source for Japan while the measures also help mitigate the risk of surplus from lower-than-expected demand during the contract period.
  • Natural gas plays an essential role in the energy mix of Japan due to the lack of domestic gas resources.
  • Japan’s total LNG demand is forecast to decline marginally until 2027 and then drop sharply from 2028 until the end of the decade driven by demand from the power sector, according to BNEF.
  • Retirement of coal plants will provide support to gas generation until 2028 but will be pressured thereafter with the gradual restart of idled nuclear power and a steady rise in renewable generation.
  • A slight increase in city gas demand by the end of the decade will partly offsetting losses from the power sector, BENF said. LNG supply contracts will continue to exceed demand at a nationwide level by 2030.
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The Japanese government is considering measures to assist companies to enter long term LNG purchase contracts potentially of around 10 years, according to NHK cited by Reuters.

  • The measures, including financial support for securing storage and creating a framework for the resale of excess supplies, are to ensure a stable supply of fuel.
  • LNG remains a crucial fuel source for Japan while the measures also help mitigate the risk of surplus from lower-than-expected demand during the contract period.
  • Natural gas plays an essential role in the energy mix of Japan due to the lack of domestic gas resources.
  • Japan’s total LNG demand is forecast to decline marginally until 2027 and then drop sharply from 2028 until the end of the decade driven by demand from the power sector, according to BNEF.
  • Retirement of coal plants will provide support to gas generation until 2028 but will be pressured thereafter with the gradual restart of idled nuclear power and a steady rise in renewable generation.
  • A slight increase in city gas demand by the end of the decade will partly offsetting losses from the power sector, BENF said. LNG supply contracts will continue to exceed demand at a nationwide level by 2030.