Japan Can Replace Sakhalin 2 LNG, Executives Say
Tokyo, November 29, 2023 – Japan’s largest power generator, JERA, and other industry executives assert the nation can secure choice liquefied natural gas (LNG) supplies to replace volumes previously sourced from the Sakhalin 2 project, even as the fallout from Russia’s invasion of Ukraine continues to reshape global energy markets. The statements signal increased confidence in Japan’s ability to diversify its energy portfolio and reduce reliance on Russian fuel.
The reassurances come after several Japanese companies, including JERA and Mitsubishi, exited the Sakhalin 2 LNG project following Moscow’s demand for payment in rubles.While the loss of Sakhalin 2 LNG initially raised concerns about Japan’s energy security, executives now believe a combination of increased LNG imports from other sources – including the United States, Australia, and Qatar – and domestic energy production can fill the gap. The shift is critical for Japan, which relies heavily on LNG imports to meet its energy needs, especially as winter demand surges.
JERA President Yukio Kani, speaking at a recent energy conference, stated the company has already secured alternative LNG supplies and does not foresee significant disruptions. “We have diversified our procurement sources and are confident in our ability to maintain a stable supply of LNG,” Kani said. He added that JERA is actively exploring long-term contracts with suppliers in various regions to further bolster its energy security.
Other Japanese utilities echoed JERA’s sentiment.Executives from Kansai Electric Power and Chubu Electric Power also indicated they have successfully secured alternative LNG sources and are prepared for the upcoming winter season. According to data from the Ministry of Economy, trade and Industry (METI), Japan’s LNG imports from Russia fell to approximately 9% in October, down from 9.7% in the previous year.
The ability to replace Sakhalin 2 LNG is a testament to Japan’s proactive efforts to diversify its energy supply and strengthen its energy security in the face of geopolitical uncertainty. METI officials have emphasized the importance of continued collaboration with international partners to ensure a stable and affordable energy supply for the nation. The long-term implications of this shift include perhaps higher LNG prices and a continued push for renewable energy sources within Japan.
