Latest news with #EmilyChow
Mint
19-06-2025
- Business
- Mint
Japan returns to long-term LNG deals on AI boom, national energy plan
Japan 2040 LNG demand may rise if decarbonisation tech lags -METI More deals to come as utilities face expiring volumes, says analyst Buyers to enhance trading ops, seek flexible deals to hedge demand uncertainty By Yuka Obayashi and Emily Chow TOKYO/SINGORE, - Japan is back in the spotlight for liquefied natural gas producers as the boom in artificial intelligence, rising costs for cleaner energy and a new national energy plan drive appetite for long-term LNG deals. While imports by China, the world's biggest LNG importer, are expected to fall this year, buyers in number two Japan are securing long-term supply deals again, including a potential landmark deal with Qatar. Japan's LNG imports had fallen for a decade as nuclear power plants, idled after the Fukushima disaster, restarted and as renewable energy sources increased. Data centres are expected to use enormous amounts of power to sustain the AI boom, while Japan's 7th Strategic Energy Plan in February identified gas as a realistic transition fuel for the nation's goal of zero net carbon emissions by 2050 and "an important energy source even after carbon neutrality". "We had expected that electricity demand in Japan would decline, but the growth of data centres is bending that curve," Yukio Kani, global CEO of JERA, the country's top power generator and LNG buyer, told Reuters. "If we want quick solutions for data centres, Japan needs LNG. That is one external change." Rising costs have also dimmed prospects for alternative fuels like hydrogen and ammonia, Kani said. "Until two or three years ago, we expected faster development of ammonia, but now we have to pause," he said. "So we've been shifting back to LNG over the past year or so." In Japan's energy plan, the Ministry of Economy, Trade and Industry forecast annual LNG demand would fall to between 53 million and 61 million tons in 2040 if it met its emissions reductions target, from 66 million tons last year. But in a risk scenario where decarbonisation technologies lag, METI forecast demand could instead rise to 74 million tons. The plan calls for public-private cooperation to secure long-term contracts for the super-chilled fuel, given price volatility and supply disruption risks. Under Japan's previous decarbonisation-focussed energy plan, gas importers had hesitated to sign long-term contracts. The new plan makes it easier for buyers to commit to long-term contracts, said Takashi Uchida, chairman of the Japan Gas Association and top city gas provider Tokyo Gas. "It's very clear that LNG has a role to play as a transition fuel, and it's now firmly still in the mix for this investment cycle," said Lachlan Clancy, energy partner at law firm Herbert Smith Freehills Kramer. Japan has also been auctioning new gas-fired power capacity mainly to replace aging coal power plants, awarding 7 gigawatts over the past two years, according to the Organization for Cross-regional Coordination of Transmission Operators, Japan. In March the organisation projected LNG-fired capacity would rise to 85.75 GW by 2034 from 79.98 GW in 2024. Japan's energy plan projects power generation will increase by between 12% and 22% from 2023 levels to between 1,100 and 1,200 terawatt-hours in 2040. Consumption by Japan's data centres will soar 80%, or about 15 TWh, by 2030, the International Energy Agency forecasts. To feed this growth, Morgan Stanley sees Japan's LNG imports rising to 78 million tons in 2030 as gas-fired power generation rises amid high costs for generating solar and wind power. Among the spate of deals since METI released the energy plan, Osaka Gas signed a 15-year pact with Abu Dhabi National Oil Company, Kyushu Electric Power said it would sign a deal with Energy Transfer, its first long-term deal with a U.S. supplier, and JERA inked four 20-year deals with U.S. suppliers NextDecade, Sempra Infrastructure, Cheniere Marketing and Commonwealth LNG. By comparison, from late 2022 to early this year, Japanese buyers had announced only three deals longer than 10 years. More deals are likely soon, Rystad Energy analyst Masanori Odaka predicts, as some utilities seek to replace expiring volumes for supply security and meet seasonal demand. JERA and Mitsui & Co are in talks for long-term supply from QatarEnergy's North Field expansion project, Reuters reported last month. Uncertainty persists, however, over Japan's demand for LNG, tied to questions over its ability to meet its carbon neutrality targets and its pace of nuclear plant restarts. To address this, importers are enhancing trading operations and pursuing flexible-term contracts. "With the government presenting multiple future scenarios, it is no longer possible to provide a definitive outlook for energy supply and demand - highlighting the uncertainty ahead," said Tokyo Gas' Uchida.
Yahoo
19-06-2025
- Business
- Yahoo
Analysis-Japan returns to long-term LNG deals on AI boom, national energy plan
By Yuka Obayashi and Emily Chow TOKYO/SINGAPORE (Reuters) -Japan is back in the spotlight for liquefied natural gas producers as the boom in artificial intelligence, rising costs for cleaner energy and a new national energy plan drive appetite for long-term LNG deals. While imports by China, the world's biggest LNG importer, are expected to fall this year, buyers in number two Japan are securing long-term supply deals again, including a potential landmark deal with Qatar. Japan's LNG imports had fallen for a decade as nuclear power plants, idled after the Fukushima disaster, restarted and as renewable energy sources increased. Data centres are expected to use enormous amounts of power to sustain the AI boom, while Japan's 7th Strategic Energy Plan in February identified gas as a realistic transition fuel for the nation's goal of zero net carbon emissions by 2050 and "an important energy source even after carbon neutrality". "We had expected that electricity demand in Japan would decline, but the growth of data centres is bending that curve," Yukio Kani, global CEO of JERA, the country's top power generator and LNG buyer, told Reuters. "If we want quick solutions for data centres, Japan needs LNG. That is one external change." Rising costs have also dimmed prospects for alternative fuels like hydrogen and ammonia, Kani said. "Until two or three years ago, we expected faster development of ammonia, but now we have to pause," he said. "So we've been shifting back to LNG over the past year or so." 'STILL IN THE MIX' In Japan's energy plan, the Ministry of Economy, Trade and Industry forecast annual LNG demand would fall to between 53 million and 61 million tons in 2040 if it met its emissions reductions target, from 66 million tons last year. But in a risk scenario where decarbonisation technologies lag, METI forecast demand could instead rise to 74 million tons. The plan calls for public-private cooperation to secure long-term contracts for the super-chilled fuel, given price volatility and supply disruption risks. Under Japan's previous decarbonisation-focussed energy plan, gas importers had hesitated to sign long-term contracts. The new plan makes it easier for buyers to commit to long-term contracts, said Takashi Uchida, chairman of the Japan Gas Association and top city gas provider Tokyo Gas. "It's very clear that LNG has a role to play as a transition fuel, and it's now firmly still in the mix for this investment cycle," said Lachlan Clancy, energy partner at law firm Herbert Smith Freehills Kramer. Japan has also been auctioning new gas-fired power capacity mainly to replace aging coal power plants, awarding 7 gigawatts (GW) over the past two years, according to the Organization for Cross-regional Coordination of Transmission Operators, Japan. In March the organisation projected LNG-fired capacity would rise to 85.75 GW by 2034 from 79.98 GW in 2024. Japan's energy plan projects power generation will increase by between 12% and 22% from 2023 levels to between 1,100 and 1,200 terawatt-hours in 2040. Consumption by Japan's data centres will soar 80%, or about 15 TWh, by 2030, the International Energy Agency forecasts. To feed this growth, Morgan Stanley sees Japan's LNG imports rising to 78 million tons in 2030 as gas-fired power generation rises amid high costs for generating solar and wind power. 'UNCERTAINTY AHEAD' Among the spate of deals since METI released the energy plan, Osaka Gas signed a 15-year pact with Abu Dhabi National Oil Company, Kyushu Electric Power said it would sign a deal with Energy Transfer, its first long-term deal with a U.S. supplier, and JERA inked four 20-year deals with U.S. suppliers NextDecade, Sempra Infrastructure, Cheniere Marketing and Commonwealth LNG. By comparison, from late 2022 to early this year, Japanese buyers had announced only three deals longer than 10 years. More deals are likely soon, Rystad Energy analyst Masanori Odaka predicts, as some utilities seek to replace expiring volumes for supply security and meet seasonal demand. JERA and Mitsui & Co are in talks for long-term supply from QatarEnergy's North Field expansion project, Reuters reported last month. Uncertainty persists, however, over Japan's demand for LNG, tied to questions over its ability to meet its carbon neutrality targets and its pace of nuclear plant restarts. To address this, importers are enhancing trading operations and pursuing flexible-term contracts. "With the government presenting multiple future scenarios, it is no longer possible to provide a definitive outlook for energy supply and demand - highlighting the uncertainty ahead," said Tokyo Gas' Uchida.
Yahoo
19-06-2025
- Business
- Yahoo
Analysis-Japan returns to long-term LNG deals on AI boom, national energy plan
By Yuka Obayashi and Emily Chow TOKYO/SINGAPORE (Reuters) -Japan is back in the spotlight for liquefied natural gas producers as the boom in artificial intelligence, rising costs for cleaner energy and a new national energy plan drive appetite for long-term LNG deals. While imports by China, the world's biggest LNG importer, are expected to fall this year, buyers in number two Japan are securing long-term supply deals again, including a potential landmark deal with Qatar. Japan's LNG imports had fallen for a decade as nuclear power plants, idled after the Fukushima disaster, restarted and as renewable energy sources increased. Data centres are expected to use enormous amounts of power to sustain the AI boom, while Japan's 7th Strategic Energy Plan in February identified gas as a realistic transition fuel for the nation's goal of zero net carbon emissions by 2050 and "an important energy source even after carbon neutrality". "We had expected that electricity demand in Japan would decline, but the growth of data centres is bending that curve," Yukio Kani, global CEO of JERA, the country's top power generator and LNG buyer, told Reuters. "If we want quick solutions for data centres, Japan needs LNG. That is one external change." Rising costs have also dimmed prospects for alternative fuels like hydrogen and ammonia, Kani said. "Until two or three years ago, we expected faster development of ammonia, but now we have to pause," he said. "So we've been shifting back to LNG over the past year or so." 'STILL IN THE MIX' In Japan's energy plan, the Ministry of Economy, Trade and Industry forecast annual LNG demand would fall to between 53 million and 61 million tons in 2040 if it met its emissions reductions target, from 66 million tons last year. But in a risk scenario where decarbonisation technologies lag, METI forecast demand could instead rise to 74 million tons. The plan calls for public-private cooperation to secure long-term contracts for the super-chilled fuel, given price volatility and supply disruption risks. Under Japan's previous decarbonisation-focussed energy plan, gas importers had hesitated to sign long-term contracts. The new plan makes it easier for buyers to commit to long-term contracts, said Takashi Uchida, chairman of the Japan Gas Association and top city gas provider Tokyo Gas. "It's very clear that LNG has a role to play as a transition fuel, and it's now firmly still in the mix for this investment cycle," said Lachlan Clancy, energy partner at law firm Herbert Smith Freehills Kramer. Japan has also been auctioning new gas-fired power capacity mainly to replace aging coal power plants, awarding 7 gigawatts (GW) over the past two years, according to the Organization for Cross-regional Coordination of Transmission Operators, Japan. In March the organisation projected LNG-fired capacity would rise to 85.75 GW by 2034 from 79.98 GW in 2024. Japan's energy plan projects power generation will increase by between 12% and 22% from 2023 levels to between 1,100 and 1,200 terawatt-hours in 2040. Consumption by Japan's data centres will soar 80%, or about 15 TWh, by 2030, the International Energy Agency forecasts. To feed this growth, Morgan Stanley sees Japan's LNG imports rising to 78 million tons in 2030 as gas-fired power generation rises amid high costs for generating solar and wind power. 'UNCERTAINTY AHEAD' Among the spate of deals since METI released the energy plan, Osaka Gas signed a 15-year pact with Abu Dhabi National Oil Company, Kyushu Electric Power said it would sign a deal with Energy Transfer, its first long-term deal with a U.S. supplier, and JERA inked four 20-year deals with U.S. suppliers NextDecade, Sempra Infrastructure, Cheniere Marketing and Commonwealth LNG. By comparison, from late 2022 to early this year, Japanese buyers had announced only three deals longer than 10 years. More deals are likely soon, Rystad Energy analyst Masanori Odaka predicts, as some utilities seek to replace expiring volumes for supply security and meet seasonal demand. JERA and Mitsui & Co are in talks for long-term supply from QatarEnergy's North Field expansion project, Reuters reported last month. Uncertainty persists, however, over Japan's demand for LNG, tied to questions over its ability to meet its carbon neutrality targets and its pace of nuclear plant restarts. To address this, importers are enhancing trading operations and pursuing flexible-term contracts. "With the government presenting multiple future scenarios, it is no longer possible to provide a definitive outlook for energy supply and demand - highlighting the uncertainty ahead," said Tokyo Gas' Uchida. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-06-2025
- Business
- Yahoo
India's GAIL sells LNG cargo as early monsoons cause weak power demand, say sources
By Emily Chow SINGAPORE (Reuters) - GAIL (India) Ltd has re-sold one liquefied natural gas (LNG) cargo this week, said three market sources on Friday, as the state-run firm's storage tanks for the fuel are full amid weak power demand in India. Fewer LNG imports by GAIL, the country's largest gas distributor, could reduce India's overall appetite for the super-chilled fuel. India is the world's fourth largest LNG buyer, importing about 26 million metric tons last year as it goes through rapid urbanisation and industrialisation and to meet growing power demand. However, GAIL's LNG tanks are filled to the brim as power demand slumped due to cooler weather from the monsoon season, leading the company to sell its LNG cargo, said two of the sources. GAIL did not immediately respond to a request for comment. The three sources did not identify which cargo GAIL sold, but shiptracking data shows two LNG vessels controlled by GAIL diverting from their routes this week. LNG tanker Gail Urja, which is currently in the southern Atlantic Ocean, was en-route to reach the Dahej terminal in India on June 21 before it made a U-turn on June 5 to head to the Gate LNG terminal in the Netherlands, Kpler data showed. The vessel loaded LNG at Cove Point, Maryland, in the United States on May 21-22, Kpler and LSEG data showed. GAIL has a 20-year deal to lift 2.3 million metric tons per annum of LNG from Cove Point. It typically takes about four weeks for LNG tankers to travel from Cove Point to India. Meanwhile another LNG tanker, Grace Emilia, has changed its course several times around Reunion Island and Mauritius since June 2, the data showed. The vessel is now heading towards Asia. India's weather office had forecast an above-average monsoon season for the second straight year in 2025, with annual rains arriving at their earliest in 16 years. The early monsoons had alleviated sweltering temperatures nationwide at the end of summer, with a sharp drop in temperatures cutting electricity consumption and briefly pushing down prices to near zero on power exchanges. Increased generation from hydropower and nuclear had also led to a decline in natural gas-fired power output, which in May fell at the steepest rate in nearly three years.
Yahoo
06-06-2025
- Business
- Yahoo
India's GAIL sells LNG cargo as early monsoons cause weak power demand, say sources
By Emily Chow SINGAPORE (Reuters) - GAIL (India) Ltd has re-sold one liquefied natural gas (LNG) cargo this week, said three market sources on Friday, as the state-run firm's storage tanks for the fuel are full amid weak power demand in India. Fewer LNG imports by GAIL, the country's largest gas distributor, could reduce India's overall appetite for the super-chilled fuel. India is the world's fourth largest LNG buyer, importing about 26 million metric tons last year as it goes through rapid urbanisation and industrialisation and to meet growing power demand. However, GAIL's LNG tanks are filled to the brim as power demand slumped due to cooler weather from the monsoon season, leading the company to sell its LNG cargo, said two of the sources. GAIL did not immediately respond to a request for comment. The three sources did not identify which cargo GAIL sold, but shiptracking data shows two LNG vessels controlled by GAIL diverting from their routes this week. LNG tanker Gail Urja, which is currently in the southern Atlantic Ocean, was en-route to reach the Dahej terminal in India on June 21 before it made a U-turn on June 5 to head to the Gate LNG terminal in the Netherlands, Kpler data showed. The vessel loaded LNG at Cove Point, Maryland, in the United States on May 21-22, Kpler and LSEG data showed. GAIL has a 20-year deal to lift 2.3 million metric tons per annum of LNG from Cove Point. It typically takes about four weeks for LNG tankers to travel from Cove Point to India. Meanwhile another LNG tanker, Grace Emilia, has changed its course several times around Reunion Island and Mauritius since June 2, the data showed. The vessel is now heading towards Asia. India's weather office had forecast an above-average monsoon season for the second straight year in 2025, with annual rains arriving at their earliest in 16 years. The early monsoons had alleviated sweltering temperatures nationwide at the end of summer, with a sharp drop in temperatures cutting electricity consumption and briefly pushing down prices to near zero on power exchanges. Increased generation from hydropower and nuclear had also led to a decline in natural gas-fired power output, which in May fell at the steepest rate in nearly three years.
