Australian Economy

Japan to ask U.S., Australia to ensure stable LNG supply

Japan’s new Economy, Trade and Industry Minister Koichi Hagiuda wearing a protective mask amid the coronavirus disease (COVID-19) outbreak, speaks at a news conference in Tokyo, Japan, October 5, 2021. REUTERS/Kim Kyung-Hoon

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TOKYO, July 12 (Reuters) – Japan’s industry minister Koichi Hagiuda said on Tuesday he will again ask the United States and Australia to boost output of liquefied natural gas (LNG) and ensure a stable supply to the country when he meets his counterparts in Sydney later this week.

“I will once again firmly request the United States, a major global LNG producer, and Australia, the largest LNG supplier to Japan, to step up production and ensure a stable supply of the fuel as the global LNG market is tightening in the wake of Russia’s invasion of Ukraine,” Hagiuda told a news conference.

Hagiuda, who had asked U.S. and Australian energy ministers for alternative supplies following the Ukraine crisis, will travel to Sydney to attend the energy ministers meeting by the Quad which includes the United States, Japan, Australia and India, on Wednesday. He also plans to hold bilateral meetings. read more

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Resource-poor Japan is facing a historic energy security risk as tensions with Moscow intensify, heightening the threat of gas supply disruptions at a time when global supply is tight and spot prices are sky-high. read more

There is an urgent need for Japan to prepare for a potential loss of investment participation and LNG supply from the Sakhalin-2 gas and oil project in Russia’s far east, analysts say.

“As for supply until around 2025, Japan will need to bolster procurement from non-Russian producers or portfolio players, and seek resale supply from Chinese players (if Russian LNG supply is cut),” Hiroshi Hashimoto, head of gas group at the Institute of Energy Economics, Japan (IEEJ), told reporters on Tuesday.

“For supply after 2026, Japanese buyers will need to sign long-term contracts for new LNG projects in the U.S., Australia, Qatar and other countries and Japan will also have to provide some kind of support to help promote development of new projects,” he said.

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Reporting by Yuka Obayashi; Editing by Jacqueline Wong

Our Standards: The Thomson Reuters Trust Principles.

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