Japan's JERA buys 1.6 mil mt spot LNG over April-June, more than triple on year

Japan's largest power generation company JERA said July 27 that it procured around 1.6 million mt of spot LNG in the April-June quarter, more than triple the 500,000 mt seen over the same period last year.

JERA's increased spot LNG procurements in April-June was part of its efforts to ensure stable electricity supply in the domestic market including for the summer demand season, a company spokesperson said.

In the April-June quarter, JERA posted a net loss of Yen 11.7 billion ($85.452 million) from a net profit of Yen 64 billion in the year-ago quarter, mainly due to the negative time lag effect, coupled with the impact of spot LNG procurements, offsetting a profit from fuel volume adjustment by its trading arm JERA Global Markets.

It was JERA's first loss in the April-June quarter since it started disclosing quarterly results in FY 2019-20, the spokesperson said.

Over April-June, JERA's electricity sales volume increased 7.8% year on year to 57.9 TWh. JERA consumed 4.52 million mt of coal for power generation in the April-June quarter, up 3.7% year on year, while LNG consumption edged up 0.5% to 5.54 million mt.

Record procurement

JERA president Satoshi Onoda said May 12 that the company had already secured a "very large volume" of spot LNG for fiscal year 2022-23 (April-March), although it had not hit the record volume seen in the previous fiscal year.

Given the deteriorating international situation, coupled with the impact from coal markets and shutdowns of other power plants in Japan, JERA is finding it difficult to foresee its incremental LNG requirements, Onoda said.

"We see procuring more [spot LNG] to be extremely tough, and this is something we need to work out and coordinate together with our country," he said.

JERA procured a record high 4.5 million mt of spot LNG in fiscal year 2021-22 (April-March), up from 3 million mt in the previous fiscal year. This came as the company maximized its efforts to ensure stable electricity supply, responding to fluctuations in its power and supply-demand balance during the summer and winter seasons.