Japan's energy security to benefit from more US LNG, JERA says (updated)

KYUDEN Holdings

31/01/2025 10:16

* 
      Japan's energy security to benefit from more US LNG,
companies
say
    

        * 
      Would drive LNG prices down, opening up additional buying
possibilities 
    

        * 
      Japan's domestic LNG demand is falling, its global LNG
trade is
growing 
    

  
 (Adds comments from Tokyo Gas and Kyushu Electric Power Co in
paragraphs 7 and 9)
    By Yuka Obayashi and Katya Golubkova
       TOKYO, Jan 31 (Reuters) - Japan's energy security will
benefit from U.S. President Donald Trump's push to increase
liquefied natural gas (LNG) production, an executive at JERA,
Japan's top LNG buyer, said on Friday, while allowing the
company to diversify its suppliers.
    LNG imports by Japan, the world's second biggest buyer after
China, continued to fall last year, decreasing by 0.4% to 65.9
million metric tons. Shipments from the United States, Japan's
key ally, rose, while supplies from Russia reduced further. 
    After retaking office on Jan. 20, Trump ordered the U.S.
Energy Department to resume the consideration of LNG export
applications after the Biden administration froze them. 
    "For Japan, which cannot supply its own energy resources,
from the prospects of security, the fact that a large amount of
U.S.-produced gas would be exported is a positive factor,"
Naohiro Maekawa, an executive officer with JERA, told reporters.
    Reuters reported on Friday that Japan is considering
offering support for a $44-billion gas pipeline in Alaska as it
seeks to court Trump and forestall potential trade friction,
according to three officials familiar with the matter. 
    For JERA, more U.S. LNG provides a good option to diversify
its supply portfolio, Maekawa said. JERA, Japan's top utility,
handles around 30-35 million tons of LNG annually, with nearly
half coming from the Asia Pacific region, including Australia,
Malaysia and Indonesia, as well as from Russia.
    "U.S. LNG is relatively easy to trade in terms of
contracts... so of course we see it as a strong candidate for
procurement," Taku Minami, chief financial officer of Tokyo Gas
 9531.T , Japan's top city gas provider, said when asked whether
the company plans to increase procurement of U.S. LNG.
    While its own domestic gas consumption is declining due to a
weaker economy, increasing use of renewable energy, and nuclear
power plant restarts, Japan is increasing LNG trade globally: it
grew 21% to 38.25 mt in the fiscal year ended last March.
    Potentially more LNG coming from the U.S. would drive prices
down, benefiting LNG procurement, said Tokio Ishii, an executive
with Kyushu Electric Power Co  9508.T . 
    Profits of JERA, a joint venture of Tokyo Electric Power Co
 9501.T  and Chubu Electric Power Co  9502.T , halved to 155
billion yen ($1 billion) in the April-December period of the
fiscal year ending in March from 339 billion yen a year ago. 
    Results were weaker due to a profitability fall from JERA's
overseas power generation, fuel and renewable energy business,
including from the Formosa 2 offshore wind project in Taiwan,
Maekawa said. 
    JERA kept its profit forecast for the full fiscal year
unchanged at 200 billion yen.     
($1 = 154.8300 yen)

 (Reporting by Yuka Obayashi
Writing by Katya Golubkova
Editing by Lincoln Feast and Emelia Sithole-Matarise)
 ((jekaterina.golubkova@thomsonreuters.com;))