Japan's LNG stocks fall 7% on week to lowest since Dec 5 at 2.16 mil mt: METI

Japan's LNG stocks held by major power utilities fell 7.3% to 2.16 million mt Jan. 9 from 2.33 million mt the week before, the lowest since touching 2.18 million mt Dec. 5, the Ministry of Economy, Trade and Industry said Jan. 12.

The Jan. 9 LNG stocks were well above the 1.49 million mt held at the end of January last year, as well as the four-year average of 1.67 million mt for the end of that month, according to METI data.

The latest LNG stocks of 2.16 million mt were also below 2.23 million mt on Nov. 28, a level before the country enters its peak winter power demand season, according to METI data.

The inventory data was being closely monitored by the LNG market as Japan has experienced snow storms and unexpected outages at coal-fired power plants in recent weeks, supporting gas-fired power generation.

Several Japanese power utilities surveyed by S&P Global Platts said Jan. 12 that the utilities were carefully evaluating their LNG requirements amid uncertainty over Indonesia's coal exports.

"We are observing the impact of Indonesia coal ban on market participants in Japan," said a source with a Japanese power utility.

A source with another Japanese power utility said that it is closely monitoring the Indonesian situations because some Japanese buyers are impacted from Indonesia's coal export ban.

Multiple ships loaded with coal bound for Japan are among 14 ships that could depart Indonesia as soon as a decision on whether to lift the country's export ban is made Jan. 12, a METI official told S&P Global Platts Jan. 11.

The Japanese loading information comes as there are currently five vessels loaded with coal among the coal carriers stuck in Indonesia, the METI official said, adding that it was not immediately clear about an exact number of vessels bound for Japan on the list of 14 ships.

There was no update from an expected Jan. 12 decision on the export ban following assessments by a cross-ministerial team, which will decide how exports will resume in the context of the fulfillment of domestic market obligations.

Indonesia banned coal exports in January over concerns that low supply of coal at domestic power plants could lead to power outages, according to a letter sent to coal producers by the country's energy ministry Dec. 31.

Heavy snow

Japan's Minister for Economy, Trade and Industry Koichi Hagiuda said Jan. 7 that the area covered by the TEPCO Power Grid could have faced a power outage had there been any glitch at the power plants, as its utilization had reached a high 97% of available supply on Jan. 6 because of a significant increase in power demand from heavy snow.

The Organization for Cross-Regional Coordination of Transmission Operators on Jan. 6 issued four directives to the TEPCO Power Grid such that it was able to obtain additional electricity from other regional utilities, including additional orders to get up to 2.76 GW of electricity over 8 pm-12 am and a maximum of 2.74 GW of electricity over 12 am-9 am Jan. 7.

The Jan. 6 directives followed a maximum 1.32 GW of electricity supply in its second order, in addition to receiving up to 1.22 GW electricity supply in its directive earlier in the day.

Japan's Kimitsu Cooperative Thermal Power Company has imposed its fuel restrictions at the 300 MW No. 5 gas-fired unit at its plant over Jan. 12-13, the company said its filing to the Hatsuden Joho Kokai System or HJKS Jan. 12. Kimitsu Cooperative Thermal Power Company is a 50:50 joint venture between JERA and Nippon Steel.

JERA also plans to shut the 600 MW No. 1 gas-fired unit at the Sodegaura thermal power plant over Jan. 13-Feb. 13 as part of its response to a rise in sea water temperatures, the company said its filing to the HJKS Jan. 12.

METI's release of LNG stock data is part of its ongoing efforts to promptly detect any significant drop in the country's LNG inventories for power generation this winter in response to the lessons of last winter.

Japan's power supply-demand balance tightened last January when the country experienced a surge in power demand that forced local power utilities to restrict gas-fired power generation due to low LNG stocks.

This was exacerbated by glitches at coal-fired power plants, low hydropower generation due to droughts, fluctuations in solar power output due to weather conditions, reduced oil-fired power generation capacity, and low nuclear power output.