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Japan to purchase LNG for utilities if

winter supply difficulties occur

PIPELINES & THE Japanese cabinet has approved measures The plan is set to be approved during the cur-
TRANSPORT that will allow government agencies to step in rent session of Parliament. Also under consid-
and purchase LNG and organise its distribution eration is a revision to the gas business law that
Japan’s overreliance if private Japanese firms find themselves facing will allow the minister to order large corporate
on LNG imports is a difficulties with obtaining sufficient supplies consumers to restrict their use of city gas if sup-
liability. during the coming winter. plies run low.
Japanese companies have become alarmed A number of LNG importers are reported to
over anticipated shortages of LNG. Russia’s have begun to line up spot cargoes well into the
invasion of Ukraine has thrown gas markets into winter months.
turmoil and questions about the availability of The force majeure announcement by Petro-
Russian LNG are a key concern. Supplies from nas that the MLNG Dua facility will be closed
US Freeport LNG are also in doubt, and the fact due to a rupture in a gas pipeline has caused con-
that Petronas has had to declare force majeure siderable concern to the Japanese. It is estimated
at its Malaysia LNG Dua facility has driven that the closure may prevent as many as 10 deliv-
concern within the Japanese government and eries to Japan. Mitsubishi and Tohoku Electric
among the country’s importers. Power both have term contracts with the facility.
The cabinet plan, which must be approved by “We have made a strong request to [Petronas]
Japan’s parliament, will permit the Japan Oil, Gas from the government for a speedy restoration as
& Metals National Corporation (JOGMEC) to well as to minimise the impact from the supply
buy LNG for utilities and power plants if their suspension through securing alternative supply
usual method of procurement becomes difficult, for Japan,” Nishimura said. “We are requesting
according to an announcement by the Ministry [Petronas] to minimise the impact by securing
of Economy, Trade and Industry (METI). alternative supply from its several LNG supply
“With the growing uncertainty of LNG points,” he added.
supply against a backdrop of increasing global Petronas supplies Japan with about 14% of its
demand, changing international conditions and LNG imports. The combined LNG export facili-
unexpected accidents, we are taking measures ties at Bintulu amount to some 30mn tonnes per
to prepare for any crisis that may cause serious year (tpy). There are three trains each at MLNG
disruptions to gas supply,” Minister Yasutoshi and MLNG Dua, two trains at MLNG Tiga and
Nishimura said. one train at Petronas LNG 9. ™

Week 42 24•October•2022 www. NEWSBASE .com P7