Japan utilities call for bigger strategic buffer LNG
01/12/2023 12:31
By Yuka Obayashi
TOKYO, Dec 1 (Reuters) - Japan's power utilities on
Friday called for an increase in the volume of the country's
strategic liquefied natural gas (LNG) buffer (SBL) to ensure a
stable fuel supply amid lingering risk of supply disruptions due
to heightened geopolitical risks.
The world's second biggest LNG buyer after China, Japan has
introduced the new SBL scheme for this winter to provide cover
for any shortfalls in the event of an emergency, after last
year's energy crunch.
As an accredited provider of the SBL, Japan's top power
generator, JERA, will secure one cargo of LNG, about 70,000
metric tons, each month from December to February in preparation
for the heating season.
Still, Japan should consider boosting the volume, Kazuhiro
Ikebe, the chairman of Japan's federation of electric utilities,
told a meeting of the country's LNG buyers, producers and
traders with the industry ministry to discuss stable LNG supply.
"Considering Japan's total LNG imports volume, the impact of
a major supply disruption would be significant," he said.
"So, public and private sectors should work together on
further initiatives, including increasing the amount of the
SBL," he said, noting geopolitical risk amid continued war in
Ukraine and the Israel-Hamas conflict in the Middle East.
JERA President Hisahide Okuda also said further discussions
on the SBL are needed.
"We have to deepen the discussion on the volume of SBL and
how the cost burden should be borne," he said.
As for this winter, Yoshifumi Murase, Commissioner of the
Agency for Natural Resources and Energy, said there is no
immediate power crunch risk given the current fuel inventory
levels.
LNG inventories held by major Japanese electric utilities
were at 2.33 million metric tons as of Nov. 26, while those by
city gas suppliers were at 2.4 million tons as of end-September,
both above the five-year average, METI data showed.
(Reporting by Yuka Obayashi; Editing by Chizu Nomiyama)
((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))