JERA says Japan's energy security to benefit from more US LNG

Japan's energy security will benefit from US President Donald Trump's push to increase LNG production, an executive at JERA, Japan's top LNG buyer, said on Friday, while allowing the company to diversify its suppliers.

LNG imports by Japan, the world's second biggest buyer after China, continued to fall last year, decreasing by 0.4 per cent to 65.9 million tonnes. Shipments from the US, Japan's key ally, rose, while supplies from Russia reduced further.

After retaking office on January 20, Trump ordered the US Energy Department to resume the consideration of LNG export applications after the Biden administration froze them.

"For Japan, which cannot supply its own energy resources, from the prospects of security, the fact that a large amount of US-produced gas would be exported is a positive factor," Naohiro Maekawa, an executive officer with JERA, told reporters.

While its own domestic gas consumption is declining due to a weaker economy, increasing use of renewable energy, and nuclear power plant restarts, Japan is increasing LNG trade globally: it grew 21 per cent to 38.25 million tonnes in the fiscal year ended last March.

Reuters reported on Friday that Japan is considering offering support for a $44 billion gas pipeline in Alaska as it seeks to court Trump and forestall potential trade friction, according to three officials familiar with the matter.

For JERA itself, more US LNG provides a good option to diversify its supply portfolio, Maekawa said. JERA, Japan's top utility, handles around 30-35 million tonnes of LNG annually, with nearly a half coming from the Asia Pacific region, including Australia, Malaysia and Indonesia, as well as from Russia.

Profits of JERA, a joint venture of Tokyo Electric Power Co and Chubu Electric Power Co, halved to 155 billion yen ($1 billion) in the April-December period of the fiscal year ending in March from 339 billion yen a year ago.

Results were weaker due to a profitability fall from JERA's overseas power generation, fuel and renewable energy business, including from the Formosa 2 offshore wind project in Taiwan, Maekawa said.

JERA kept its profit forecast for the full fiscal year unchanged at 200 billion yen.

(Reporting by Yuka Obayashi Writing by Katya Golubkova Editing by Lincoln Feast.)