The 8th annual Japanese LNG Producer Consumer Conference brought together Asia’s major LNG buyers with their key international suppliers. The conference took place in Tokyo on September 26 and is organised by the Ministry of Trade and Industry (METI) together with Tokyo Gas.

Wood Mackenzie moderated a panel ‘Innovations to support further growth in the LNG industry’. In response to Japan’s announcement on its commitment to invest additional $10 billion in global LNG infrastructure projects, Wood Mackenzie research director Nicholas Browne said: “Previous LNG Producer-Consumer conferences have made the Japanese case for increased flexibility such as removing destination clauses, joint procurement, diversification away from oil indexation, increased transparency and development of Asian LNG hubs. Many of these policy measures have subsequently been realised.

“A key announcement today is that Japan is planning to invest additional $10 billion to develop infrastructure mainly in new and developing markets in the India sub continent and Southeast Asia, reflecting a shift in priorities. This is an evolution from the spending plan from two years ago which was focused on encouraging new supply sources and has been largely realised through Japanese investments in Arctic 2 and Mozambique LNG.

“This new $10 billion will include public-sector financing from JBIC (the Japan Bank for International Cooperation), as well as from JOGMEC, the state-backed Japan Oil, Gas and Metals National Corp, in addition to purely commercial groups such as trading houses and banks. The government-owned Nippon Export and Investment Insurance will offer full coverage for LNG-related financing.

“Given the challenging credit rating of many of these markets, having this financing underwritten should reduce the financing costs and help LNG compete with other fuels like coal.

“For Japan, it serves the purpose of growing the global Asian LNG market, and improving liquidity and flexibility. Meanwhile, Japanese companies may also be beneficiaries given their strength in regasification terminal development, gas to power and gas infrastructure.”

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1st October 2019