U.S. Energy Secretary Rick Perry's ongoing trip to Japan is slated to be a boon for liquefied natural gas (LNG) exporters. Sources told Bloomberg that Perry will sign an agreement to promote American LNG in resale venues for developing nations surrounding Japan.
A natural gas oversupply problem has pushed Tokyo to become a LNG resale hub for the developing countries in its circuit. At this point, Japan is the largest LNG importer in the world.
"The Secretary looks forward to having a productive dialogue with Japanese officials about a multitude of issues, including the potential for increased LNG exports from the United States to Asia," Shaylyn Hynes, a spokesperson from the Department of Energy, said in an email.
American LNG exports to Japan have occurred on an on-and-off basis since June 2011, data from the Energy Information Administration (EIA) shows. Currently the commodity is sold at a rate of $7.18 per thousand cubic feet - the highest level since August 2015.
In January, Japan bought its first shipment of liquefied natural gas derived from fracking. The 70,000-ton cargo was the first of a series of shipments that will total 700,000 tons by the end of 2017.
"In 2016, most US LNG exports went to customers in the Western Hemisphere," Richard D. Kauzlarich, former U.S. ambassador to energy hubs Azerbaijan and Bosnia said earlier this year. "[S]hipments to East Asia (especially Japan and China) will overtake destinations in this hemisphere in 2017."
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Asian destinations for American oil and gas exports will spur the kind of economic development President Donald Trump promised constituents during his campaign, analysts say. Congress allowed companies to begin selling oil to other countries in December 2015, with the approval of the Obama administration.
"We see few better ways for the Trump administration to deliver on its promises of job creation and trade deficit reduction, than liquid natural gas agreements with major importers, such as China, India, Korea and Japan," said Michael Roomberg of the Burner Tip Fund.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More
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