JAPAN – Japan and its private sector firms have in September this year, announced that they will invest $10 billion on liquefied natural gas (LNG) projects worldwide during the annual LNG Producer-Consumer Conference.
The move, according to the Minister of Economy, Trade and Industry (METI), Isshu Sugawara, is in line with Japan’s strategy to boost the global LNG market and reinforce the security of energy supply.
“On top of Japan’s commitment two years ago of investing or financing more than US$10 billion in energy supply chains, we are making a fresh commitment of additional and collective $10 billion funding from both public and private sectors,” said Isshu Sugawara.
The new US$10 billion investment doubles a commitment it made two years ago to bolster energy supply chains and reduce its reliance on energy from the Middle East.
As a part of Japan’s effort to broaden use of the super-chilled fuel, the country also plans to train 500 experts in LNG technology, said Sugawara.
In its 2017 pledge to bolster energy supply chains, Tokyo already promised to train 500 experts in areas such as LNG reception technology and environmental regulations.
“By making these commitments to help develop the global LNG market, Japan will work hard to reinforce global energy security,” he said.
Japan’s previous funding commitment was made by former METI minister Hiroshige Seko at the LNG Producer-Consumer Conference in 2017.
That original $10 billion budget has been largely used up through spending or funding commitments to major projects such as LNG Canada, in which trading house Mitsubishi Corp (8058.T) has a stake, and Mozambique LNG project in which trader Mitsui & Co (8031.T) owns a stake, according to an official at the industry ministry.
The country has already trained over 400 experts since 2017, the METI official said.
Japan is the world’s biggest LNG buyer and the growing tensions in the Middle East have threatened the stability of global oil supply and by extension gas energy.
The attack on state-owned Saudi Aramco oil processing facilities at Abqaiq (Biqayq in Arabic) and Khurais in eastern Saudi Arabia in September this year is a good example of how the tensions in middle east are affecting global energy supply.
The attack cut down Saudi Arabia’s oil production by about half – representing about 5% of global oil production – leading to widespread anxiety and a steep rise in global oil prices.
The intensified efforts by Japan are thus a way of reducing reliance on the middle east as its main source of crude oil energy.