JBIC to fund Trafigura to enhance LNG supply to Japan

State-owned Japan Bank for International Cooperation (JBIC) will finance Singaporean trading firm Trafigura, aiming to enhance supply security of LNG to resource-poor Japan.

JBIC agreed on 28 March to loan up to $390mn to Trafigura. Japanese bank Sumitomo Mitsui Banking will co-finance the project, taking the total funds to around $560mn.

The loan is aimed to provide funds required for Japanese utilities to import term LNG supplies through Trafigura. But JBIC has declined to reveal further details about how the funds will be used to realise stable imports by utilities.

Japan's LNG demand has been falling with a gradual increase in nuclear and renewable power capacity. The country imported 66mn t of LNG in 2023, down by 8pc from a year earlier, customs data show.

But LNG would play a vital role to ensure energy security in Japan, especially during the energy transition period, as Japan heads towards its 2050 net zero emissions goal. Japan's installed gas-fired capacity is likely to increase to 83.54GW by the April 2033-March 2034 fiscal year, up by 4.12GW from 2023-24, according to nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators.

By Motoko Hasegawa