Exclusive-Japan’s JERA plans to expand US LNG | Commodities

By Marwa Rashad

DAVOS, Switzerland (Reuters) -Japan’s prime LNG purchaser, JERA, plans to increase its purchases of liquefied from the US to diversify its provide and meet demand growth spurred by knowledge centres and AI, a senior government advised Reuters.

U.S. President Donald Trump pledged to unleash the U.S. power industry to spice up output and threatened the EU with tariffs if the bloc didn’t buy more gasoline, which means JERA may need to compete with different consumers for more U.S. gasoline.

Dealing with between 30-35 million metric tons (mt) of LNG yearly, Japan’s largest utility presently sources almost half of this from the Asia Pacific area, together with Australia, Malaysia and Indonesia.

“This accounts for very high exposure. My plan is to rebalance that and to make our LNG supply portfolio more diversified,” Ryosuke Tsugaru, JERA’s head of LNG division, advised Reuters on the sidelines of the World Financial Discussion board annual assembly within the Swiss resort of Davos.

“My plan is to increase our exposure to the U.S. energy projects. We are now buying 3.2 million tons in long-term contracts from America which is small against the total purchase amount,” he added, with out detailing the anticipated increase.

Nevertheless, JERA will probably be watching carefully the long-term sustainability of LNG insurance policies in the US, the world’s largest LNG exporter which in 2024 alone shipped 88.3 million tonnes of the super-chilled gasoline.

Trump ordered the U.S. Power Division to renew contemplating functions for LNG exports after the Biden administration froze them.

SEEKING POTENTIAL ALTERNATIVES TO RUSSIA

Tsugaru mentioned that JERA welcomed Trump’s insurance policies to speed up oil and gasoline manufacturing and development of new LNG tasks, nonetheless long-term sustainability remained key.

“The U.S. is now a major energy supplier to the global market. So we are very much hoping America continues to be reliable and competitive source of supply,” he added.

Prioritising provide reliability and affordability, JERA additionally plans to speak to suppliers within the Center East “to have a more geographically balanced energy portfolio”, he added.

Russian provides to Japan are susceptible to sanctions and future growth in Russian LNG has been curtailed, leaving Japan searching for potential options.

JERA has two contracts with Russia’s Sakhalin-2 project, a deal for 0.5 million metric tons every year working till 2026, and for 1.5 million metric tons every year expiring in 2029.

Tsugaru mentioned he was hopeful of persevering with to grow a long-term LNG partnership with Qatar courting back to the Nineties.

Reuters has reported that Qatar was discovering it exhausting to agree new LNG offers with Japan amid rising competitors from the U.S. and elsewhere with more versatile contract phrases.

“Qatar has their own commercial aspirations and requirement. We do have our own, but leveraging long-term partnership … I am hopeful to continue and grow long-term LNG partnership with Doha,” he mentioned.

Tsugaru mentioned JERA has a more constructive view on natural gasoline demand and power demand in Japan, pushed by rising demand for steady energy, together with from knowledge centres and AI.

Requested for his market forecast, he mentioned JERA was “generally bullish” for the 2026 to 2029 period to be “kind of balanced” provided that some new LNG tasks will probably be delayed.