Among Global Uncertainties, Japan Still Sees Key Role for LNG in Energy Security

January 20, 2025|LNG / Energy Security

Hoping to boost both domestic energy security and cement its role as a leading LNG trading hub, especially for Southeast Asia, Japan continues to diversify its source of suppliers across the globe for the super-chilled fuel. The country has also launched its own strategic LNG reserve to cover any emergency or rapid surge in demand.

Casting a wide net for diversified oil and gas sources has long been a cornerstone of Japan’s energy policy. In 2024 alone, LNG arrived from 20 countries. This trend of riskhedging supply through diversity is expected to continue and is a clear statement that the government still sees a key role for fossil-fuel generation at home and abroad.

In recent decades, Japan has been one of the world’s leading importers of LNG, and volumes jumped even further in the wake of the March 2011 Fukushima disaster. When the nation’s entire fleet of nuclear reactors was idled soon after, LNG (and coal) filled the gap.

In recent years, however, factors such as economic stagnation, nuclear plant restarts, market liberalization, and the installation of more renewables capacity have led to a decline in Japan’s LNG demand.

For key LNG suppliers to Japan – Australia, the Middle East, the U.S. and Russia – the market remains highly attractive even if today China has become the world’s top importer. The Japanese government’s recent energy strategy draft assured its support for the chilled gas as a stable power generation fuel amid an energy transition and global market turmoil. But does that marry with the strategy of Japanese LNG buyers?

LNG Plant in Yokohama, Japan, Photo by Herman Darnel Ibrahim via Wikimedia Commons

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