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Japan, the world’s second-largest LNG importer, urged the United States and Australia on Tuesday to boost production and deliveries to ensure enough supply of the hottest energy commodity.
“I will once again firmly request the United States, a major global LNG producer, and Australia, the largest LNG supplier to Japan, to step up production and ensure a stable supply of the fuel as the global LNG market is tightening in the wake of Russia’s invasion of Ukraine,” Japan’s Industry Minister Koichi Hagiuda said at a news conference as carried by Reuters.
Hagiuda will attend an energy forum in Sydney, Australia, where he is set to meet officials from the top LNG exporting nations. The U.S., Australia, and Qatar are the three biggest LNG exporters in the world. Australia is the largest LNG supplier to Japan, which was the top LNG importer for decades until last year when China became the world’s largest LNG importer.
Japan will need to buy more non-Russian LNG until 2025 and seek to buy cargoes Chinese players are re-selling, according to Hiroshi Hashimoto, head of gas group at the Institute of Energy Economics, Japan (IEEJ).
Related: IEA Director: Price Cap On Russian Oil Should Extend To Fuels
For LNG supply in the longer term, Japanese buyers will need long-term supply deals with new projects in Australia, the U.S., and Qatar, Hashimoto said on Tuesday, quoted by Reuters.
Resource-poor Japan and other major energy consumers are struggling with a global crunch in LNG, which is being soaked up by Europe as the EU looks to replace as much Russian pipeline gas as soon as possible. Europe’s race to procure LNG supply has sent spot prices so high that developing economies in Asia can no longer afford it.
Meanwhile, LNG buyers are returning to long-term contracts in order to secure the long-term supply of non-Russian gas and to insulate themselves from spiking volatile spot prices.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com