Japan turns to Australia, US for long-term LNG supply

Japan is bolstering its long-term liquefied natural gas (LNG) reserves, particularly from allies like Australia and the United States, as contracts with key providers such as Russia are slated to conclude by the early 2030s, according to Reuters.

Amidst this backdrop, Japan’s major power producer, JERA, recently acquired a significant stake in Australia’s Woodside Energy’s Scarborough project, a move prompted by concerns over potential disruptions in gas access stemming from the Ukraine crisis.

Despite encountering political obstacles, Japan remains steadfast in its commitment to securing LNG from dependable sources, with recent agreements covering a substantial portion of its consumption needs. Japanese utilities are actively exploring new ventures in the United States, despite regulatory freezes, signaling a proactive stance in diversifying their energy portfolio and mitigating risks associated with geopolitical tensions.

The significance of collaboration with allies for Japan’s energy security has heightened in the aftermath of the Ukraine conflict-induced energy crisis. Efforts to reduce reliance on Russian LNG are underway, with increased emphasis on forging partnerships with alternative suppliers. This strategic shift underscores Japan’s imperative to ensure a stable and diversified energy supply chain to safeguard against future disruptions.

While challenges persist, Japan’s proactive efforts to secure LNG from trusted allies and diversify its energy sources reflect a pragmatic approach to navigating geopolitical uncertainties and safeguarding its energy security in the long term.