Japanese buyers scout for gas cargoes to prepare for winter peak By Reuters

© Reuters. FILE PHOTO: Liquefied pure gasoline (LNG) storage tanks and a membrane-type tanker are seen at Tokyo Electrical Energy Co.’s Futtsu Thermal Energy Station in Futtsu, east of Tokyo, Japan, February 20, 2013. REUTERS/Issei Kato

By Jessica Jaganathan

SINGAPORE (Reuters) – Japanese consumers of liquefied (LNG) are scouting for cargoes to make sure they’ve enough provides of the super-chilled gas to satisfy peak heating demand this winter, business sources advised Reuters.

A spike in demand from one of many world’s prime importers of LNG will probably increase costs at a time when a gasoline scarcity in Europe has been preserving them elevated.

The companies embrace utilities and no less than one gasoline firm, the sources mentioned, including that Japan’s greatest energy generator and prime LNG purchaser, JERA, can also be searching for cargoes for supply in December and January.

A JERA spokesperson declined to remark.

Japan’s Ministry of Economic system, Commerce and Business is encouraging energy corporations to fill up for the winter. The electrical energy reserve fee in coming winter will not be excessive sufficient for a chilly winter”, mentioned a supply at a Japanese agency.

Particulars of the businesses’ necessities, corresponding to general volumes wanted, couldn’t instantly be confirmed as they had been searching for the cargoes privately, the sources mentioned.

It mentioned final week that Japan’s LNG stock held by main electrical utilities stood was about 2.3 million tonnes as of Oct. 15, a five-year excessive, although the federal government has warned that electrical energy provides this winter could also be at their tightest for the reason that 2011 Fukushima catastrophe.

A chilly winter may draw down reserves rapidly, leaving the utilities to scramble for spot cargoes as they did earlier this yr, merchants mentioned.

LNG imports into Japan – overtaken this yr by China because the world’s prime LNG purchaser – are on observe to rise almost 4% this month from September to about 5.5 million tonnes, ship-tracking information from Refinitiv Eikon confirmed on Friday.

Rising costs of oil and gasoline are, nonetheless, more likely to restrict purchases, the sources mentioned. Oil costs rose to multi-year highs whereas LNG spot costs spiked to information this month amid a world vitality crunch. Whereas LNG costs are off their highs, they continue to be greater than 400% greater than this time final yr.

Japanese utilities have been asking oil refiners for further provides to generate energy as they attempt to change from LNG amid the excessive costs, although the change will probably be restricted as burning oil to generate electrical energy – often costly and polluting – is usually a final resort.

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