US, Canada, Australia to be key growth suppliers for Japan's LPG imports: JLPGA chief

US, Canada and Australia are expected to be key growth suppliers for Japan's LPG imports in 2024, Kazuhiko Ezawa, chairman of the Japan LP Gas Association, told S&P Global Commodity Insights March 5, with Canada and Australia having already accounted for nearly a third of the country's total LPG inflows.

Speaking on the sidelines of the International LPG Seminar 2024 in Tokyo, Ezawa said increasing LPG imports from the US, Canada and Australia will be supporting Japan's LPG imports this year.

"We hope to boost the imports," said Ezawa, who is also president, ENEOS GLOBE. "The most troubling aspect of [the demand uncertainty] surrounds the uncertainty over calories of LNG procured by city gas utilities that affects the [LPG] demand for adjusting heating values for city gas."

Ezawa's comments came as Japan's LPG demand for city gas has been supported in recent years as a result of increasing imports of lean US LNG for city gas that requires raising heating values for blending with LPG.

Diverse imports

During the conference, Ezawa said Japan's LPG imports are getting more diverse with increasing inflows from Australia and Canada at a time when imports from the US continue to rise despite transit constraints in the Panama Canal.

Japan's share of LPG imports from Australia and Canada rose to 29% of its total LPG inflows of 10.596 million mt in 2023, from a share of 25.9% in total imports of 10.812 million mt in 2022, according to the JLPGA data presented by Ezawa.

The country's share of US LPG imports rose to 65.9% in 2023, from 62.7% in 2022, according to the JLPGA data.

Speaking to S&P Global, Ezawa said that Japan's LPG imports from Australia and Canada are increasing as part of the country's supply diversification efforts, coupled with its response to transit risk through the Panama Canal.

"Of course, [the increased imports from Australia and Canada] is to do with Panama [Canal] risk to some extent, but it is more of diversification [efforts] including the Panama [situation] for sure," Ezawa said.

At the conference, Ezawa said that drought-led transit restrictions in the Panama Canal have continuously impacted LPG carriers by rerouting them via a longer shipping route through the Cape of Good Hope.

"While there are some optimistic outlooks of expecting an improvement in the water level by this summer, the situation remains unpredictable to date," he added.