TOKYO, Sept 29 (Reuters) - The Japanese government will
provide support through public financial institutions to help
utilities secure liquefied natural gas (LNG) amid a surge in
spot prices, the industry minister said on Thursday.
"The Japan Bank for International Cooperation (JBIC) and
other public financial institutions will offer support to
Japanese companies in procuring LNG to ensure adequate fuel
supplies," Yasutoshi Nishimura, the industry minister, told an
LNG Producer-Consumer Conference.
"We believe such a move will contribute to stable LNG supply
in Asia," he said.
Japan wants to avoid an energy crunch by offering financial
support before winter, when heating demand is expected to
increase. Spot LNG prices remain at high levels amid a risk of
supply disruption from Russia given its war with Ukraine.
Details of the planned support were not given, but JBIC will
provide low-interest loans to electric power utilities and city
gas companies to buy the super-chilled fuel from the spot
market, the Nikkei business daily reported earlier on Thursday,
without citing sources.
Japanese utilities buy the bulk of their LNG through
long-term contracts, but about 20% comes from the spot market.
Asian spot LNG prices have skyrocketed this year, hitting a
record high in August, though they since have eased because of
high inventory levels and governments' efforts to curb demand in
Europe. There are, however, market fears that a cold winter in
Europe could see prices return to record levels.
Japan imports about 10% of its LNG from Russia, mainly from
It would cost Japan more than 1 trillion yen ($6.9 billion)
to buy 6 million tonnes of LNG a year from the spot market if
shipments from Russia were stopped completely, the Nikkei said.
($1 = 144.3700 yen)
(Reporting by Yuka Obayashi; Editing by Jamie Freed, Kirsten