Mutually Beneficial: Japan's Gas Industry Head on Higher US LNG Imports

Japan's gas industry head, Takeshi Uchida, says that higher imports of US liquefied natural gas (LNG) would enhance Japan's supply stability and energy security, but must be pursued in a mutually beneficial manner. Uchida also expressed concerns about the Trump administration's tariffs and warned that further measures could weaken the global economy. The Alaska LNG project, which is expected to cost more than 6 trillion yen ($40 billion), is seen as a potential source of US LNG for Japan.

In a recent development, Japan's gas industry head, Takeshi Uchida, has emphasized the need for higher imports of US liquefied natural gas (LNG) to bolster Japan's energy supply stability and security. Uchida, who is also the chairman of Japan's Ministry of Economy, Trade, and Industry's Natural Gas Association, made these remarks while expressing concerns about the potential economic repercussions of the Trump administration's tariffs [1].

According to a draft of Japan's latest energy strategy plan, the country intends to continue diversifying its energy sources and reduce its reliance on fossil fuels. Although the draft does not specify targets for individual fossil fuels like coal or LNG, the Japanese government has emphasized the importance of utilizing LNG-fired power as a realistic means of transition [1].

Japan's gas industry has long relied on LNG imports, with the United States being a significant supplier. In 2020, US LNG accounted for about 20% of Japan's total LNG imports [1]. However, recent reports suggest that LNG demand in Japan, South Korea, and Europe, three of the country's top markets, is tapering off [1]. The US Department of Energy (DOE) recently released a study stating that LNG demand in these countries has peaked and that the global LNG market is expected to experience a surplus in the coming years [1].

Despite these concerns, US projects continue to attract investment, as industry experts believe that it is best to let the market determine which projects are built. Ben Cahill, a senior associate for the Energy Security and Climate Change Program at the Center for Strategic and International Studies, emphasized that the future global demand scenario in the DOE study is based on several assumptions that are a "shaky foundation for any policy shift" [1].

As Japan pursues higher LNG imports from the United States, the two countries must work together to ensure a mutually beneficial agreement. The Trump administration's tariffs have raised concerns among Japanese officials, who fear that further measures could weaken the global economy [1]. However, if both countries can find common ground, higher LNG imports could help Japan achieve its goal of reducing its reliance on fossil fuels and enhancing its energy security.

References:
[1] Natural Gas Intel. (2023, January 10). Japan's LNG Imports Forecast to Stay Steady as Buyers Increase Trading. https://www.naturalgasintel.com/news/japans-lng-imports-forecast-to-stay-steady-as-buyers-increase-trading/