Japan to step up support for Asia’s switch to LNG for power generation

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Japan will step up its efforts to support Asian countries’ switch from coal to liquefied natural gas for use in power generation to reduce carbon emissions, in hopes of reducing supply costs from the source of electricity. energy, said the Ministry of Industry.

Japan, the world’s largest consumer of LNG, expects increased demand for the fuel, which pollutes less than coal, to lead to increased production by countries in the region and diversification of suppliers, the ministry said. Economy, Trade and Industry.

Japan is looking to expand LNG supply from key suppliers such as Australia, Qatar and the United States to include more Asian producers, which generally lack sufficient infrastructure for exports.

A vessel carrying liquefied natural gas arrives at a dock near a JERA Co. power plant in Kawagoe in central Japan’s Mie prefecture on January 23, 2020. The shipment marked Japan’s first delivery of LNG as part of the Freeport LNG project in Texas, in which JERA and Osaka Gas Co. participated. (Kyōdo) == Kyōdo

Efforts to reduce procurement costs and ensure stable supply come as the country faced depletion of LNG stocks in an unusually cold climate this winter.

The world’s third-largest economy, which depends on LNG for nearly 40% of total electricity generation, doubled its public-private investment initiative to $20 billion in 2019 to help Asian countries build LNG terminals, storage tanks and other facilities needed for overseas shipments.

LNG is mainly traded under long-term contracts with prices linked to those of crude oil. Such exchanges make it difficult to supply LNG in a timely manner at prices based on supply and demand conditions.

Japan hopes that more producers and buyers would help establish an LNG market with flexible pricing.

Coal is still a major fuel source for fast-growing Southeast Asian economies, such as Indonesia and Vietnam, due to its affordability. But LNG produces about half the carbon dioxide emissions that coal produces when burned for power generation.

If seven Asian countries – India, Indonesia, Vietnam, the Philippines, Malaysia, Thailand and Myanmar – switched from coal-fired to gas-fired power plants, it would reduce carbon dioxide emissions by about 864 million tons, or 71% of Japan’s annual greenhouse gas emissions, according to ministry data.

Such a change is estimated to create an additional LNG demand of 166 million tonnes, more than double Japan’s annual imports, according to the data.

Japan’s LNG imports rose sharply in the absence of nuclear power generation following the Fukushima Daiichi nuclear crisis, triggered by the devastating earthquake and tsunami in the northeast of the country in March 2011.


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