How to make an energy policy: Japan will invest abroad to increase LNG supplies, but does not give up on Russia
Photo by David Edelstein on Unsplash
How do you do an energy policy when you only have very few internal sources? With planning, diversification and investments, like Japan does. The Land of the Rising Sun will increase investments in the production of liquefied natural gas abroad to guarantee the national energy supply, the country's industry minister said today.
" The Russian invasion of Ukraine has intensified competition for the purchase of LNG, raising concerns about the stable supply of fuel for Japan ," Minister Koichi Hagiuda told media according to Reuters.
" The government must be at the forefront to ensure LNG through cooperation with the private sector, " added the senior official.
Hagiuda also noted that global investment in liquefied natural gas production has declined due to efforts to decarbonise economies even as demand, especially in Asia, is on the rise. Therefore, without adequate investments, an unparalleled energy crisis is being prepared. Japan has decided to avoid getting into trouble, as is happening in European countries. The latter are now competing hard with traditional oriental buyers who often have long-term contracts.
Europe is now the top destination for record U.S. LNG exports, as price-sensitive developing economies in Asia Pacific are moving away from the spot market and shifting to coal and petroleum products as the price of LNG it is unsustainable for them.
Japan, meanwhile, remains a major destination for Russian liquefied natural gas. The country has stakes in two projects there, Sakhalin-1 and Sakhalin-2, and has said it has no intention of following Western supermajors and ending its presence in Russian energy.
These projects "are essentially important for energy security because they allow Japan to procure supplies below the market price, especially due to the current high energy prices," Hagiuda said earlier this week, as quoted by Natural Gas Intelligence.
Nikkei Asia reported this month that if Japan exits Sakhalin-2, it could end up paying about 33% more per year for LNG imports per year. Japan is the largest gas importer globally in terms of capacity, with over 227 million tons per year. An energy source that you DO NOT intend to give up.
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The article How to make an energy policy: Japan will invest abroad to increase LNG supplies, but does not give up on Russia comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/come-si-fa-una-politica-energetica-il-giappone-investira-allestero-per-aumentare-le-forniture-di-lng-ma-non-rinuncia-alla-russia/ on Sun, 17 Apr 2022 17:06:13 +0000.