Japanese state-owned energy agency Jogmec has signed its first LNG emergency supply agreement with Malaysia's state-owned Petronas, allowing the former to procure LNG during an emergency, which could help ensure stable energy supplies.
Jogmec and Petronas LNG, a subsidiary of Petronas, signed a master sales and purchase agreement (MSPA) at the LNG producer-consumer conference in Tokyo late last week. Under the deal, Jogmec can secure a certain amount of LNG from Petronas during emergencies and supply it to private-sector importers in Japan if they are unable to procure the fuel on their own. Details of the agreement, including contract volumes and duration, were not disclosed.
This is the first scheme that allows Jogmec to directly procure LNG from suppliers in emergencies, an official at the trade and industry ministry Meti told a press briefing after the conference. Tokyo will seek similar agreements with other countries, he added.
The agreement improves the relationship between Petronas and Japan, a key LNG market for Petronas for more than four decades, Petronas said.
Ensuring preparedness for supply disruptions has become increasingly important for resource-poor Japan. Japan is less dependent on Middle Eastern LNG than it is on Middle Eastern crude, but any disruptions would still require the country to secure alternative sources of supply.
Japan imported 5.7mn t of LNG from Malaysia over January-July, up by 1.4pc from a year earlier, the country's customs data show. But overall LNG imports fell by 4.1pc to 35.9mn t in January-July. Japan also increased LNG imports from the US by about 15pc to 2.7mn t. Meanwhile, LNG supplies from Qatar and the UAE plunged by 51pc and 43pc, respectively, to 840,000t and 240,800t.
