Japan to provide excess imported LNG to Europe amid Ukraine tensions

The Yomiuri Shimbun

16:09 JST, February 9, 2022

With Europe’s supply of natural gas from Russia at risk amid the increasing tensions over Ukraine, the Japanese government has decided to provide European nations with a portion of the liquefied natural gas that Japan imports.

The government’s unusual move came following a request from the United States to shore up energy supplies for Europe, which depends heavily on Russian gas.

The United States and the European Union have announced policies to impose economic sanctions on Russia if it invades Ukraine. In retaliation, Russia might suspend the gas it provides to Europe.

Japan imports almost all of its LNG, which is used for thermal power generation and to supply gas to utilities. The government plans to ask for cooperation from domestic companies that have natural gas rights overseas after procuring the necessary amount for the nation. Details on the amount provided to Europe and the schedule will be discussed further, although the amount is expected to be small.

Electricity and gas consumption increases in winter due to demand for heating and hot water. In Japan, the electricity situation became tight last winter, especially in western Japan, because of a shortage of LNG. The situation has also been severe this winter, with Tokyo Electric Power Company Holdings, Inc. having to receive electricity from other utility companies in January.

Regarding the Ukraine issue, Japan places importance on acting in concert with the other Group of Seven nations — the United States, Britain, Canada, France, Germany and Italy. As long as enough LNG is secured for domestic use, the government concluded that any excess can be provided to European nations.

A looming energy shortage is on the horizon for European nations. Inventory of natural gas usually sits at about 70%, but it stood at 50% in January. The EU depends on Russia for about 40% of its natural gas supply. The decrease in inventory is believed to have resulted from a reduction in supply from Russia.

Germany, which relies on Russia for more than half of its natural gas supply, is among the EU nations fearing an energy crisis. Russia, by threatening to cut off gas supplies, is seemingly trying to cause discord between European nations and the United States over the Ukraine issue.

U.S. President Joe Biden’s administration has sought to ease concerns about gas shortages in Europe so that the United States and the EU can closely coordinate their response to the Ukraine situation. Washington has thus requested Asian nations that import LNG, including Japan, China and South Korea, to consider providing a portion of their imports to Europe. In response to the U.S. request, Australia plans to expand its exports of LNG to Europe.

Washington also worked to encourage Qatar, a prominent natural gas producer, to export gas to Europe.