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Osaka Gas to purchase more LNG than

usual in upcoming fiscal year

JAPAN JAPAN’S Osaka Gas will buy more LNG than In the past, with more favourable spot
usual in the financial year beginning in April prices, Osaka Gas typically took a slightly short
Osaka Gas has a as it seeks to guarantee a stable supply of the position and then relied on purchasing extra
contract for supplies super-chilled fuel as experts predict global supply from the spot market in the case of a
from Brunei due to supply will remain tight, the company’s pres- shortage. However, now the company is chang-
expire this month. ident, Masataka Fujiwara, said on March 15. ing course, choosing instead to be in a slightly
Spot LNG prices skyrocketed in 2022 fol- long position amid the higher prices and
lowing Russia’s invasion of Ukraine as Europe potential risks surrounding supply disruption.
sought to wean itself off Russian gas. However, “We made a procurement plan with a mar-
since mid-December prices have fallen due to gin, as causing a supply shortage is the worst
a milder than usual winter in Europe. thing,” Fujiwara added.
“Still, we see a risk of the prices surging LNG purchasers have the ability to exercise
again sometime in the next financial year amid a contract clause called upward quantity tol-
tight global supply as Europe moves further erance (UQT), which is normally a flexibility
away from Russian gas,” Fujiwara said. embedded in long-term contracts where buy-
Nevertheless, the city gas provider is seek- ers can ask for 5% to 10% of extra volumes.
ing to insulate itself from possible supply Osaka Gas has indicated it plans to use this
shocks, such as the fire at the Freeport LNG flexibility.
export terminal in the US and the pipeline leak Osaka Gas together with JERA and Tokyo
at Malaysia LNG last year. Gas have a contract with Brunei set to expire

P14 www. NEWSBASE .com Week 11 17•March•2023