METI does not see any need for an emergency LNG supply, despite the fact that Japanese utilities have increased their LNG reserves

The Ministry of Economy, Trade and Industry said that major Japanese utilities have increased their liquefied gas stocks by 10% to?2,19 million metric tonnes last week.

The LNG stocks of Japan's utilities, the second largest LNG buyers in the world, equaled around 12 days domestic consumption for the week ending March 1. The LNG stockpiles of utilities in Japan, the world's second-largest LNG buyer, are equal to around 12 days domestic use for the week ending on March 1.

Only 6% of Japan's total LNG imports come from the Middle East, specifically Qatar, Oman, and the United Arab Emirates. The Strait of Hormuz has been closed since the U.S. attack on Iran.

The war in the Middle East has caused a spike in global oil and gas prices. Iran is attacking energy facilities and ships, closing the Gulf of Mexico and forcing production to stop.

METI has instructed JERA, Japan’s largest LNG buyer, to secure at least one LNG shipment - approximately 70,000 tons a month in order to mitigate supply risk under the Strategic Buffer LNG scheme.

A METI official stated that "we have not received any support requests from electric power companies or gas companies to use SBL." According to METI's communications with companies, there is no immediate risk of a?LNG shortfall at this time, said the official.

JERA refused to comment on SBL, but stated that none of its LNG ships have been affected so far by the 'war in the Gulf Region and the LNG production stoppage by Qatar.

Kansai Electric Power gets about 13% of its LNG from Qatar. If the current situation continues for a long time, the company could have problems with their LNG supplies from Qatar.

According to Kpler analyst Go Katayama Japan has over 4 million tons in storage of?LNG. And given that the Strait of?Hormuz only delivers 0.1 million tonnes per week, Japan is "highly insulated" from a Strait?of Hormuz interruption.

Katayama stated that Japan's LNG stockpiles would cover three weeks in a pure Hormuz outage scenario. (Reporting and editing by Christian Schmollinger, Thomas Derpinghaus and Yuka Obayashi)

(source: Reuters)