METI Release Some Plans for Strategic LNG Reserve in Japan

The Ministry of Economy, Trade and Industry (METI) in Japan has released some details about its plans for a strategic LNG reserve according to ICIS.

• Japan is looking to establish a LNG reserve system this year to secure gas resources for "unexpected situations" according to industry minister Yasutoshi Nishimura last month.
• Plans show a number of LNG importers are required to establish a surplus buffer to be able to redirect LNG to other Japanese companies according to need as determined by METI.
• A re-sale at a loss is reimbursed, while proceeds from profit is returned.
• The scope is escalated from regional to national cooperation depending on the severity of recipient's shortfall.
• The project could help to balance out a growing trend of city gas companies holding surplus LNG storage, while power utilities have seen falling stocks.
• Contractual volumes are currently considered sufficient to build the strategic buffer but could suggest Japanese utilities will be less inclined to sell into international market according to ICIS.