Japan’s top utilities and energy companies are accelerating their LNG push into Asia as they seek to capitalize on new markets for the fuel. Southeast Asia is of particular interest and a key component of METI’s 2020 international energy strategy.

As of today, Japanese firms including JERA, Tokyo Gas, and KEPCO are active in about 30 projects across Asia-Pacific that span the entire value chain, from distribution infrastructure and regasification terminals, to gas-fired power plants. The proposed generation capacity of projects with Japanese involvement has climbed to about 60 GW.

The context is that Japan faces an oversupply of LNG in the coming years and needs to build ‘secondary’ markets to sell its surplus. Long-term offtake agreements with Australia, Qatar, Malaysia, and the U.S. helps to protect Japan’s security of supply but also lock buyers into volumes that the domestic market seems no longer able to absorb. Should METI’s own 2040 national energy mix forecasts materialize, demand will wane further.

Despite softening domestic demand, the government sees it as imperative to defend Japan’s position as one of the top players in the LNG sector. That means finely balancing new investment in supply and the demand side within an industry often susceptible to economic and political changes.