Japan's largest LNG importer Jera is in discussions with suppliers under long-term contracts over potential additional LNG procurement, while maintaining sufficient inventories at least for March and April, a company spokesperson told Argus today.
The talks come as the ongoing US-Iran war has disrupted LNG shipments through the strait of Hormuz. The company declined to provide further details on possible additional supplies, such as the country of origin, volume, or shipping schedule.
No vessels bound for Jera have been affected by the closure of the strait of Hormuz so far. But if the situation escalates or becomes prolonged, navigation restrictions on LNG carriers could be imposed, potentially affecting shipments to Japan and commodity prices, the spokesperson said.
Japan depends on the Middle East for around 10pc of its LNG needs, with imports through the strait — including from Qatar and the UAE — accounting for around 6pc. Jera currently holds a term contract with state-owned Qatargas to buy 700,000 t/yr of LNG through 2028 and has secured a 3mn t/yr, 27-year offtake deal with state-owned QatarEnergy starting in 2028.
It remains unclear how much LNG inventory Jera currently holds, but an LNG shortage is not expected at this time, the company said. Japan's overall LNG stocks stand at slightly less than 4mn t, including volumes for power generation and city gas production, Meti said on 10 March. The combined stock level is equivalent to about a year of imports through the strait of Hormuz, Meti added.
Stronger tie-up with South Korea
Jera signed a memorandum of understanding (MOU) with South Korea's state-owned Kogas on 14 March to further enhance cooperation in optimising their LNG operation. The companies plan to explore cargo swaps by utilising their LNG terminals, while convening information exchange meetings at least twice a year. Nothing has been decided regarding cargo swaps under the current instability in Middle East supply, the spokesperson said.
The latest MOU has advanced the existing cooperation between Jera and Kogas in their LNG business. The companies have strengthened their partnership particularly since the April 2023 agreement, in which they committed to discussing future collaboration to ensure stable LNG imports, including cargo swaps, trading, shipping optimisation and exchange of their market views.
