LNG tankers in Yokohama, Japan
Letter from Japan: Power market risks highlight LNG rework
Flexibility and sharing of risk in gas buying and selling is becoming more essential
LNG is a super-chilled commodity but for Japanese buyers it has become a little too hot to handle. Sellers insensitive to the new fundamentals in Japan beware.The familiar pattern was for Japanese power and gas utilities to acquire at least 80–85% of their demand under contracts stretching decades. That is increasingly going out of fashion, and the reasons are not only decarbonisation, a weak yen and trouble securing financing. Arguably the biggest factor is ‘gate closure’. The term refers to a point in time when electricity generators must submit their final expected output to the grid operator, about an hour before delivering on the promise. A day before the electricity is produced, utilit
Also in this section
17 December 2024
Structurally lower GDP growth and the need for a different economic model will contribute to a significant slowdown
17 December 2024
Policymakers and stakeholders must work together to develop a stable and predictable fiscal regime that prioritises the country’s energy security and economy
17 December 2024
The incoming administration is expected to quickly change-up the LNG approvals process and boost several major projects to FID. But market fundamentals still matter
16 December 2024
Middle East grades remain a diminished but important part of the South Asian country’s diet, especially as new refining capacity comes online
