Page 5 - AsianOil Week 47 2022

AsianOil COMMENTARY AsianOil

Under-investment in LNG export projects mn in loans available to the group. Announcing
was deemed the reason for the shortage of LNG, its latest loan to JERA, JBIC said the money is
a consequence of a time several years ago when aimed at supporting JERA’s import of LNG to
LNG and gas prices were very low and also the secure a stable supply of electricity by ensuring a
coronavirus (COVID-19) pandemic, when the consistent energy flow to Japan.
energy markets saw a severe drop in demand Australia was Japan’s largest LNG supplier
and an uncertain future made investment in 2021, covering 40% of imports. But Australia
unviable. is facing its own domestic gas crisis whereby
Although big LNG exporters like Qatar, its populous eastern coast is seeing greater gas
which recently signed a 27-year supply contract demand and price rises, while 80% of Austral-
with China, and the US, which expects to see a ian gas is exported. Members of the Australian
boost in its export capacity in the next couple parliament have called for exports to be limited
years, are ploughing ahead with plans to greatly and for Australian LNG delivered to domestic
expand LNG production, long-term contracts markets.
will not be available until 2026, according to the A deal between the government and export-
ministry. ers is said to have been reached so as not to actu-
Japan is in the process of adjusting a num- ally restrict some LNG from leaving Australia.
ber of policies designed to ease any stress the Bearing this in mind, Australian Resources Min-
power system may experience this winter. The ister Madeleine King reassured Japanese Minis-
government will be able to order large energy ter of Economy, Trade and Industry Yasutoshi
users to cut their use of natural gas if a shortage Nishimura during a recent visit to Tokyo that
appears that could damage the economy or the deliveries of Australian LNG and coal to Japan
welfare of citizens. State-owned Japan Oil, Gas would not be disrupted.
and Metals National Corporation (JOGMEC) But Japan is right to be cautious about supply.
has received the okay to buy LNG on the spot Last month, Malaysia’s state-owned oil and gas
market if necessary. company Petronas declared force majeure on gas
In early October, JBIC said it would make supply to its MLNG Dua facility due to a pipe-
nearly $900mn available to JERA, a joint venture line disruption. Japan is expected to lose as many
between Tokyo Electric Power Co. (TEPCO) and as 10 cargoes as a result, but it is not expecting
Chubu Electric Power, in syndication with finan- the interruption of supply to create any major
cial institutions from the private sector for LNG problems. Japan has, however, asked Petronas
spot market purchases. And at the end of the to replace the lost LNG cargoes as soon as it is
month, JBIC said it would make a further $674 capable of doing so. ™

Week 47 28•November•2022 www. NEWSBASE .com P5