Japan's JERA buys record 7 mil mt spot LNG in FY 2022-23 on US Freeport outage

Japan's largest power generation company JERA bought a record 7 million mt of spot LNG in fiscal year 2022-23 (April-March), up 56% from the previous record high of 4.5 million mt in the prior fiscal year, a senior company official told reporters April 28.

The boost in JERA's spot LNG procurement in FY 2022-23 was mostly attributed to the US Freeport LNG outage, Tetsuo Yoshida, JERA's head of finance, told an earnings press briefing.

JERA, which has a 25.7% stake in Freeport LNG Development, is the operator of the Freeport LNG project and lifts 2.32 million mt/year of Freeport LNG.

"The main reason for the increased spot [volume] is due to inability to procure Freeport LNG," Yoshida said, adding that the company expects to normalize liftings from the Freeport terminal as scheduled for FY 2023-24, following the full resumption of operations at the terminal.

Freeport LNG received permission from US regulators on March 8 to resume commercial operations of the remaining liquefaction unit at the three-train, 15 million mt/year export terminal after a lengthy outage.

The approval from the US Federal Energy Regulatory Commission paved the way for Freeport to further ramp up production at the Texas facility, which can take more than 2 Bcf/d of feedgas when fully operational.

Freeport was forced to shut down for eight months following an explosion and fire at the facility on June 8, 2022. Freeport LNG received approval from FERC to return to commercial operations of two LNG trains at the facility on Feb. 21, 2023, and requested permission to bring the remaining train back on Feb. 27.

JERA's spot LNG procurements were significantly boosted in recent years as part of its efforts to ensure stable electricity supply, responding to fluctuations in its power and supply-demand balance during the summer and winter seasons.

For FY 2022-23, JERA cut its LNG use for thermal power generation by 8% on the year to 23.63 million mt, while it boosted its coal consumption by 7.1% from the year ago to 21.46 million mt due to, among other factors, the commercial start up of the 1.07 GW Taketoyo No. 5 coal-fired unit in August 2022.