In order to improve the security of LNG supply to Japan, the State Bank of Japan for International Cooperation (JBIC) has agreed to provide financing to the trading firm Trafigura.
The relevant LNG supply to Japan
The agreement, reached on March 28, involves a loan of up to $390 million by the JBIC with co-financing from Japan’s Sumitomo Mitsui Banking, bringing the total funds to approximately US$560 million.
This funding is aimed at providing the necessary resources for utilities in Japan to import long-term LNG supplies through Trafigura. through Trafigura. LNG demand in Japan has shown a downward trend, due to the gradual increase in nuclear and renewable energy capacity.
In 2023, the country imported 66 million tons of LNG, a reduction of 8% compared to the previous year. Despite this decline, LNG remains crucial to Japan’s energy security, especially during its transition to a net-zero emissions future by 2050.
Japan’s installed gas-fired capacity is also forecast to increase significantly, reaching 83.54 GW for the fiscal year covering April 2033 to March 2034, according to data from the Organization for Interregional Coordination of Transmission Operators. This increase, which represents an increase of 4.12 GW over the 2023-24 period, reflects the crucial role that natural gas will play in the Japanese energy matrix during the coming transition years.
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Source: Trafigura
Photo: Shutterstock
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