Hiroshima Gas builds two LPG tanks for lean LNG

Hiroshima Gas builds two LPG tanks for lean LNG

Share:

Comprehensive energy news coverage, updated nonstop

8.25$/month*

*billed annually at 99$/year for the first year then 149,00$/year ​

Unlimited access • Archives included • Professional invoice

OTHER ACCESS OPTIONS

7-Day Pass

Up to 50 articles accessible for 7 days, with no automatic renewal

3 $/week*

FREE ACCOUNT

3 articles/month

FREE

*Prices are excluding VAT, which may vary depending on your location or professional status

Since 2021: 30,000 articles • 150+ analyses per week

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.

Rockpoint Gas Storage priced its initial public offering at C$22 per share, raising C$704mn ($515mn) through the sale of 32 million shares, with an over-allotment option expanding the transaction to 36.8 million shares.
Tailwater Capital secures $600mn in debt and $500mn in equity to recapitalise Producers Midstream II and support infrastructure development in the southern United States.
An economic study reveals that Germany’s gas storage levels could prevent up to €25 billion in economic losses during a winter supply shock.
New Fortress Energy has initiated the initial ignition of its 624 MW CELBA 2 power plant in Brazil, starting the commissioning phase ahead of commercial operations expected later this year.
Talen Energy launches $1.2bn debt financing and expands credit facilities to support strategic acquisitions of two combined-cycle natural gas power plants.
The Ukrainian government is preparing to raise natural gas imports by 30% to offset damage to its energy infrastructure and ensure supply continuity during the winter season.
Driven by rising electricity demand and grid flexibility needs, natural gas power generation is expected to grow at an annual rate of 4.8% through 2030.
Talen Energy secures $1.2bn term financing and increases two credit facilities to support the acquisition of two natural gas power plants with a combined capacity of 2,881 MW.
Tenaz Energy finalised the purchase of stakes in the GEMS project between Dutch and German waters, aiming to boost production to 7,000 boe/d by 2026.
Sembcorp Salalah Power & Water Company has obtained a new 10-year Power and Water Purchase Agreement from Nama Power and Water Procurement Company, ensuring operational continuity until 2037.
Eni North Africa restarts drilling operations on well C1-16/4 off the Libyan coast, suspended since 2020, aiming to complete exploration near the Bahr Es Salam gas field.
GOIL is investing $50mn to expand its LPG storage capacity in response to sustained demand growth and to improve national supply security.
QatarEnergy continues its international expansion by acquiring 27% of the offshore North Cleopatra block from Shell, amid Egypt’s strategic push to revive gas exploration in the Eastern Mediterranean.
An analysis by Wood Mackenzie shows that expanding UK oil and gas production would reduce costs and emissions while remaining within international climate targets.
Polish authorities have 40 days to decide on the extradition of a Ukrainian accused of participating in the 2022 sabotage of the Nord Stream pipelines in the Baltic Sea.
The Japanese company has completed the first phase of a tender for five annual cargoes of liquefied natural gas over seven years starting in April 2027, amid a gradual contractual renewal process.
Baker Hughes has secured a contract from Bechtel to provide gas turbines and compressors for the second phase of Sempra Infrastructure’s LNG export project in Texas.
Targa Resources will build a 500,000 barrels-per-day pipeline in the Permian Basin to connect its assets to Mont Belvieu, strengthening its logistics network with commissioning scheduled for the third quarter of 2027.
Chevron has appointed Bank of America to manage the sale of pipeline infrastructure in the Denver-Julesburg basin, targeting a valuation of over $2 billion, according to sources familiar with the matter.
Hungary has signed a ten-year agreement with Engie for the annual import of 400 mn m³ of liquefied natural gas starting in 2028, reinforcing its energy diversification strategy despite its ongoing reliance on Russian gas.

All the latest energy news, all the time

8.25$/month*

*billed annually at 99$/year for the first year then 149,00$/year ​

Unlimited access - Archives included - Pro invoice

7 DAY PASS

Up to 50 items can be consulted for 7 days,
without automatic renewal

3$/week*

*Prices shown are exclusive of VAT, which may vary according to your location or professional status.

Since 2021: 30,000 articles - +150 analyses/week.