Japan rushes LNG cargoes to Europe amid Ukraine tension

Japan has started diverting some of its liquified natural gas (LNG) cargoes to Europe, the country’s industry minister Koichi Hagiuda said on Wednesday, offering Europe a contingency plan over fears that supplies will be disrupted by a possible Russian invasion of Ukraine.

Multiple gas shipments are already being diverted to Europe by private Japanese companies, Koichi Hagiuda said, but declined to provide details of the quantum of LNG involved. He said the unusual diversions came after Japan received requests “to accommodate the need” for the fuel from the United States and European Union ambassadors.

“We have communicated to both the US and EU that this co-operation is to be carried out only to the extent that it does not affect Japan's electricity and gas supplies,” Hagiuda was quoted in local media. 

Japan, the world's top LNG importer until last year, is heavily dependent on LNG – with some reports suggesting LNG stockpiles are already low in the country as record snow hits parts of it.

The government is likely to first secure sufficient LNG inventories needed for power generation and other domestic purposes and ask companies with LNG interests for cooperation, local media reported in Tokyo.

More ships will head to Europe in March, but LNG supplies will be strictly contingent on ensuring domestic demand is met, Hagiuda told reporters. A Japanese trade ministry official separately told Reuters that Japanese gas companies will receive market price for the fuel.

Natural gas used in Europe is mostly supplied from Russia, mainly via pipelines. With fears mounting of a conflict or military escalation in Ukraine, global fuel prices have hit record highs in recent times amid projections of an energy crisis in Europe – which depends heavily on Russian gas.