Japan Boosts LNG Procurement with South Korea and Italy
In an effort to increase energy security and adapt to changing demand, Japan has announced it will explore liquefied natural gas (LNG) cooperation with South Korea and Italy.
As the world’s second-largest LNG importer, behind China, Japan is seeking more flexibility in its LNG procurement strategies while bolstering its energy resilience.
The country is focusing on securing shorter, more adaptable contracts that allow for resales, offering the ability to shift cargoes when domestic demand fluctuates.
The partnership with South Korea marks a significant step towards streamlining LNG procurement across the region.
Japan’s largest utility company, JERA, is teaming up with Korea Gas Corporation (KOGAS), one of the major LNG buyers in South Korea.
According to a statement from Japan’s Ministry of Economy, Trade and Industry (METI), both countries are actively working towards joint procurement opportunities, cargo swaps and other collaborative efforts.
"The governments of both countries expect that this endeavour will serve as the starting point for a new LNG cooperation between Korean and Japanese companies," said the statement co-signed by the South Korean Ministry of Trade, Industry and Energy.
The move signals a broader trend of regional cooperation aimed at ensuring stable LNG supply amid global market uncertainties.
Italy steps in for LNG support
In addition to working with South Korea, Japan is also engaging with Italy in LNG procurement. The state-backed Japan Organisation for Metals and Energy Security (JOGMEC) has signed a preliminary agreement with Italian energy giant Eni.
"We already deal with Japanese buyers on a short-term basis and we would like to expand that collaboration also to a long-term basis," commented Cristian Signoretto, Eni's Director for Global Gas and LNG Portfolio, at an LNG conference in Hiroshima.
This deal opens the door to joint procurement efforts as Eni, like many global energy players, is actively seeking investors for its LNG projects.
One of Japan’s primary goals in these new partnerships is to secure more flexible LNG contracts.
Japanese companies have increasingly sought shorter contracts with the option to resell LNG cargoes, giving them the ability to redirect shipments if domestic demand wanes. This kind of flexibility is crucial for managing Japan’s energy needs, especially as the country ramps up its trading capabilities within the LNG sector.
Tokyo Gas, Japan’s largest city gas provider, is already working on joint procurement initiatives that strengthen its ability to respond to emergencies.
Procuring a 'buffer supply'
Japan’s LNG strategy also involves building up a strategic buffer supply.
JERA has been tasked by the government to secure one LNG cargo per month from December to February, amounting to around 70,000 metric tons, to prepare for the winter heating season. This effort highlights the country’s focus on maintaining a stable supply of LNG during peak consumption periods.
Wael Sawan, Shell's CEO, also remains optimistic about LNG's role in the energy landscape.
"With a 50% growth trajectory between now and 2040 and with this being really the only serious, credible solution that gives you both energy security as well as decarbonising the energy system in the particular sector in which it works, I continue to be very bullish about the role of LNG," he said.
By fostering partnerships with South Korea and Italy, Japan is positioning itself to navigate a dynamic and often volatile global LNG market. With a growing emphasis on flexibility and cooperation, these agreements mark an important chapter in Japan’s pursuit of energy security and procurement resilience.
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