Hiroshima Gas builds two LPG tanks for lean LNG

Hiroshima Gas builds two LPG tanks for lean LNG

Share:

Gain full professional access to energynews.pro from 4.90$/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90$/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 $/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99$/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 $/year from the second year.

Hiroshima Gas has announced the start of construction for two liquefied petroleum gas (LPG) tanks at its liquefied natural gas (LNG) terminal in Hatsukaichi beginning in December. These facilities aim to increase the company’s capacity to receive different types of LNG, including lean LNG. The commissioning of the tanks, each with a storage capacity of 990 metric tons, is scheduled for September 2026. This initiative is part of Hiroshima Gas’s strategy to diversify its LNG supply sources before the expiration of its current contracts around 2030.

According to company officials, adding these LPG tanks will prepare the company for a greater availability of lean LNG, notably from the United States. LPG is used in Japan to adjust the calorific value of city gas, and lean LNG requires a larger amount of LPG to reach the required energy levels. Currently, Hiroshima Gas transports LPG by tanker trucks from other terminals to Hatsukaichi. With the new tanks, the company plans to receive LPG directly by coastal vessels.

Diversification of LNG Supply Sources

Kazunori Tamura, Senior Executive Officer and Board Member of Hiroshima Gas, stated that this approach aims to anticipate the renewal or gradual expiration of LNG purchase contracts by 2030. The company is currently contracted for a total of approximately 400,000 metric tons of LNG per year, with suppliers such as Sakhalin 2 in Russia, Osaka Gas, and Malaysia LNG. Facing uncertainty over the renewal of the contract with Sakhalin 2, which expires in March 2028, Hiroshima Gas is exploring various options to secure its supply.

Satoshi Sano, General Manager of the Energy Resources and International Business Department, emphasized the importance of diversifying LNG supply sources to reduce risks. The company favors medium- and long-term supply contracts as the basis of its portfolio while maintaining the flexibility to adapt to market developments. Hiroshima Gas also has contingency plans to procure LNG from other companies in case of disruptions to its current contracts.

Adapting to LNG Market Developments

The construction of the new LPG tanks will enable Hiroshima Gas to receive low-calorific-value LNG, a growing trend with the increase of lean LNG exports from the United States. Japan’s Ministry of Economy, Trade and Industry (METI) forecasts a 12.8% increase in LPG demand for city gas by fiscal year 2028-2029, mainly due to this development. By strengthening its LPG storage capacity, Hiroshima Gas positions itself to effectively meet this growing demand.

The Hatsukaichi terminal, unique in its kind, was designed to minimize impact on the local environment. Located opposite Miyajima Island, a World Heritage site housing the Itsukushima Shrine, the terminal uses “pit-in” type LNG tanks. These tanks are built in underground concrete pits, reducing their visibility and environmental footprint. Since 2016, the terminal has been capable of receiving standard LNG carriers with capacities up to 177,000 kiloliters.

Future Outlook for Hiroshima Gas

With the expansion of the terminal’s area to 50,000 square meters in 2021, Hiroshima Gas has increased its operational capacity. However, due to current LNG storage limitations, the company can unload only about half the cargo from a standard LNG carrier, with the rest delivered to another terminal. To address this constraint, Hiroshima Gas has signed a joint transportation contract with Tokyo Gas until fiscal year 2027-2028.

By enhancing its LPG storage capacity and diversifying its LNG supply sources, Hiroshima Gas is preparing for the challenges of the global energy market. The company aims to ensure a stable gas supply for its customers while adapting to technological and geopolitical changes. The decision regarding the renewal of the contract with Sakhalin 2 remains pending, but Hiroshima Gas continues to explore all options to secure its energy future.

NextDecade has signed a liquefied natural gas supply agreement with EQT for 1.5 million tonnes annually from Rio Grande LNG Train 5, pending a final investment decision.
Sawgrass LNG & Power has renewed its liquefied natural gas supply agreement with state-owned BNECL, consolidating a commercial cooperation that began in 2016.
Gazprom and China National Petroleum Corporation have signed a binding memorandum to build the Power of Siberia 2 pipeline, set to deliver 50 bcm of Russian gas per year to China via Mongolia.
Permex Petroleum signed a $3 million purchase option on oil and gas assets in Texas to support a strategy combining energy production and Bitcoin mining.
Enbridge announces the implementation of two major natural gas transmission projects aimed at strengthening regional supply and supporting the LNG market.
Commonwealth LNG’s Louisiana liquefied natural gas project clears a decisive regulatory step with final approval from the U.S. Department of Energy for exports to non-free trade agreement countries.
The Indonesian government confirmed the delivery of nine to ten liquefied natural gas cargoes for domestic demand in September, without affecting long-term export commitments.
Hungary has imported over 5 billion cubic metres of Russian natural gas since January via TurkStream, under its long-term agreements with Gazprom, thereby supporting its national energy infrastructure.
Hokkaido Gas is adjusting its liquefied natural gas procurement strategy with a multi-year tender and a long-term agreement, leveraging Ishikari’s capacity and price references used in the Asian market. —
Korea Gas Corporation commits to 3.3 mtpa of US LNG from 2028 for ten years, complementing new contracts to cover expired volumes and diversify supply sources and price indexation.
Petrobangla plans to sign a memorandum with Saudi Aramco to secure liquefied natural gas deliveries under a formal agreement, following a similar deal recently concluded with the Sultanate of Oman.
CTCI strengthens its position in Taiwan with a new EPC contract for a regasification unit at the Kaohsiung LNG terminal, with a capacity of 1,600 tonnes per hour.
Exxon Mobil forecasts sustained growth in global natural gas demand by 2050, driven by industrial use and rising energy needs in developing economies.
Capstone Green Energy received a 5.8-megawatt order for its natural gas microturbines, to be deployed across multiple food production facilities in Mexico through regional distributor DTC Machinery.
Private firm Harvest Midstream has signed a $1 billion acquisition deal with MPLX for gas processing and transport infrastructure across three western US states.
Sempra Infrastructure and EQT Corporation have signed a 20-year liquefied natural gas purchase agreement, consolidating Phase 2 of the Port Arthur LNG project in Texas and strengthening the United States’ position in the global LNG market.
Subsea7 was selected to lead phase 3 of the Sakarya gas field, a strategic contract for Türkiye’s energy supply valued between $750mn and $1.25bn.
Tokyo protests against Chinese installations deemed unilateral in a disputed maritime zone, despite a bilateral agreement stalled since 2010.
Bp has awarded Baker Hughes a long-term service agreement for the Tangguh liquefied natural gas plant, covering spare parts, maintenance and technical support for its turbomachinery equipment.
Chinese group Sinopec has launched a large-scale seismic imaging campaign across 3,000 km² in Mexico using nodal technology from Sercel, owned by Viridien, delivered in August to map areas with complex terrain.

Log in to read this article

You'll also have access to a selection of our best content.