Japan has decided to cooperate with EU and US requests to divert surplus LNG cargoes to Europe in response to severe gas shortages in the continent, Minister for Economy, Trade and Industry Koichi Hagiuda said Feb. 9.
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Register NowHagiuda said the decision following meetings with EU ambassador Patricia Flor and US ambassador Rahm Emanuel earlier in the day at which the ambassadors had requested the diversion.
"This is about diverting surplus [cargoes] to Europe whilst ensuring stable LNG to Japan," Hagiuda told reporters.
Japan's decision came at a time when the country is still in the middle of the peak winter power and gas demand season.
"Our country is also still in a tough LNG situation for February," Hagiuda said. "We do not necessarily have sufficient room, but we have an outlook of having enough stockpiles to respond to Japan's supply and demand."
"Specifically, a couple of destination-free LNG ships controlled by Japanese companies are heading to and arriving Europe in February," he said.
"We expect more ships heading to Europe, and we are requesting [Japanese] companies to consider [diversions] as much as possible by looking at situations beyond April."
The EU and US first approached Japan late January about the possibility of diverting LNG cargoes to Europe, with a formal request from the US last week and from the EU on Feb. 9, an METI official said.
Supply concerns
European gas prices remain at historic highs due to low levels of storage, curtailed Russian flows, and winter supply concerns amid the standoff between Russia and the West over Ukraine.
There remain concerns that Russian gas deliveries to Europe could be disrupted in the event of an escalation of the Russia-Ukraine crisis.
European Commission officials have held talks with key suppliers in recent weeks in a bid to secure additional gas supplies, including Qatar, the US and Azerbaijan.
The TTF day-ahead price hit a record high Eur182.78/MWh on Dec. 21, an increase of 985% year on year, according to S&P Global Platts price assessments.
Prices have cooled since, though they remain high, with the TTF day-ahead contract assessed Feb. 8 at Eur75.80/MWh, still a year-on-year increase of 265%.
In a statement after meeting with the METI minister, the US ambassador welcomed Japan's announcement of support for European partners.
"Japan's assistance to Europe is an example of how President Biden and Prime Minister Kishida are working closely together with like-minded partners to deter Russian aggression against Ukraine, and uphold our shared values," Emanuel said.
In a separate statement, the EU said its delegation had "a productive meeting" with Hagiuda, with the Japanese side indicating that it would assist in efforts to secure sufficient LNG supplies for Europe.