GASTECH-Japan’s JERA looks at Alaska and Qatari Liquefied Natural Gas to meet demand and diversify supply

JERA, Japan's largest power generator, is increasing its interest in U.S. LNG, especially from Alaska. It is also in talks with QatarEnergy about securing faster and more efficient routes for supply to Japan. JERA, the company's Chief Low-Carbon Fuel Officer, told reporters that it is exploring other LNG suppliers than its traditional ones to meet Japan’s increasing energy needs. AI-driven data centers are driving up demand for electricity.

Tsugaru stated that JERA was keen to secure supplies from Alaska LNG because of its proximity to Japan during an interview with the Gastech conference held in Milan.

"Alaska is a huge reserve, and would otherwise be stranded. Alaska is also close to Japan. It would take 35-40 days to transport cargo from the US Gulf Coast to Japan. "You can get Alaska LNG in eight days," said he. JERA signed on Wednesday a letter-of-intent with Alaska LNG developer Glenfarne for the exploration of 1 million metric ton a year offtake over a 20-year period. JERA wants to conclude its talks with QatarEnergy - one of the largest LNG suppliers in the world - for a long term supply agreement from Qatar's North Field Expansion Project as soon as possible. JERA didn't renew a supply agreement of 5.5 million tonnes per annum with Qatar in 2021.

Tsugaru said, "We are very interested in re-establishing the long-term partnership between Qatar and JERA." He added that there are still several issues to resolve before a deal can be finalised.

He said that JERA was also interested in equity investments in Qatar. "I'm willing to look at anything we consider to be of mutual interest. That includes potential equity participation."

JERA continues to rely heavily on the Sakhalin-2 Russian project. Sakhalin-2 has two contracts that JERA currently holds, one of 0.5 mtpa for 2026 and the other for 1.5 mtpa for 2029.

JERA manages 30-35 million tonnes of LNG per year, almost half of which is sourced in the Asia-Pacific region including Australia, Malaysia Indonesia and Russia.

Tsugaru's predictions for the future were a global glut of supply due to increased capacity, but this would be later than 2028.

The real timing of capacity expansion will be delayed. According to my estimation, a massive capacity increase will take place in 2030 or 2031.

(source: Reuters)