Japanese utilities' LNG stocks rebound 9% on week despite snowfall in Tokyo

LNG stocks held by Japan's major power utilities rebounded in the week to Feb. 13, rising 9.2% to 1.78 million mt from 1.63 million mt the week before, the Ministry of Economy, Trade and Industry said Feb. 16, despite snowfall in Tokyo Feb. 10.

The LNG inventory last increased week on week on Dec. 23 when it hit a peak this winter season of 2.42 million m, METI data showed.

METI does not have directly comparable data for the same week last year, but at the end of February 2021 stocks stood at 2.3 million mt, while the four-year average for end-February is 1.98 million mt, the METI data showed.

While Japan announced its decision Feb. 9 to divert some of surplus LNG cargoes to Europe amid gas shortages in the continent following the EU and the US requests, at least two Japanese power and gas utilities bought spot LNG cargoes for April arrivals after the government announcement, market sources told S&P Global Platts.

Japan's decision came at a time when the country is still in the middle of the peak winter power and gas demand season.

"This is about diverting surplus [cargoes] to Europe whilst ensuring stable LNG to Japan," Minister for Economy, Trade and Industry Koichi Hagiuda said Feb. 9.

"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."

In the wake of higher-than-expected demand following a sharp drop in temperatures Feb. 10, Japan's Organization for Cross-Regional Coordination of Transmission Operators issued its second order Feb. 10 for the TEPCO Power Grid to receive up to 751 MW and 800 MW of electricity from other regional utilities in the day to ensure sufficient supply.