JERA Japan secures enough LNG through July, despite the Iran crisis
JERA, Japan’s largest power generator, said it had enough liquefied natural gas inventories to cover Middle East disruptions due to the U.S. and Israel war against Iran.
JERA is also Japan's largest LNG buyer. It handles 35 million metric tonnes of LNG imports and trades annually, with about 27 million tons being used in Japan. Around 5% of its Japan-bound shipments go through the Strait of Hormuz where the conflict has caused shipping to be disrupted.
Masato Otaki told reporters that the company has enough stock to last through July.
He added that "we'll do everything we can to ensure flexible fuel procurement, by leveraging JERA Global Markets' trading capabilities", referring to JERA Trading.
Otaki didn't comment on specific trading actions, but its trading division has the flexibility of swapping, buying?or selling with other companies or through the spot market.
Around 20% of the world's fossil fuel supplies are transported through the Strait of Hormuz which runs along Iran.
Otaki stated that, depending on the length of the blockade, they will have to adapt their procurement strategy.
JERA has signed a deal for a 27-year period with QatarEnergy to produce 3 million tons of coal per year (mtpa), starting in 2028, from the North Field South Expansion Project.
Otaki stated that JERA was not fully informed by QatarEnergy of the full impact the conflict has had on construction schedules and will closely monitor any effects for procurement contracts, while communicating with suppliers.
Otaki responded that JERA would consider each case individually.
JERA's profit for the fiscal period that ended in march rose by 5.2% compared to a year ago, reaching 193.5 billion yen (US$1.21 billion).
JERA said that the increase in sales was due to a decrease in fuel costs, as well as a boost in its overseas power generation and renewable energy businesses.
JERA has not disclosed its profit forecasts for the current fiscal years, citing the uncertainty on the commodity markets and in fuel purchases due to the Iran Crisis.
(source: Reuters)
