Japan adopts alternatives to Russian gas

In Japan, ship insurers announced that they were cancelling coverage for war risks in Russia, Ukraine and Belarus. The announcement comes after reinsurers withdrew from the region in the face of significant losses.

Share:

Japan receives 9% of its imported LNG from Sakhalin-2, which is owned by Gazprom and Japanese trading houses, and without this cover future imports would certainly be halted.

But also push Japanese electricity and gas utilities such as JERA and Tokyo Gas Co LtdDiversifying supplies could help Japan emancipate itself from the Russian Sakhalin-2 oil project. He accounts for 9% of Japan’s total LNG imports, or 74.3 million tons per year.

Indeed, 60% of the 10 million tons of gas extracted in Sakhalin goes to Japan. This covers nearly 10% of the country’s needs. The Archipelago imports 97.8% of its LNG, 60% of which is used to generate electricity. And 30% are used for city gas.

However, as a result of its actions in Ukraine, Russia is exposed to heavy sanctions in which Japan participates. In addition, the Russian government decided in June to take control of Sakhalin-2, pushing Shell out.

Japan does not want to give up Sakhalin-2 for security reasons, but a new direction is needed…

In order to avoid a supply disruption, the three Japanese insurers are negotiating with different reinsurers to keep the war coverage.

The Japanese government is asking insurers to take on additional risks. In particular, to continue to provide maritime war insurance to LNG shippers in Russian waters.

The Financial Services Agency and the Natural Resources and Energy Agency made the request in a joint letter to the country’s general insurance association. Tokyo wants to ensure that Japan will continue to import LNG from the Sakhalin-2 project in Russia.

In addition, other options may also emerge. Shipowners can continue their operations without war cover by assuming the risks. The trips between Sakhalin Island and Japan are short, taking only a few days. In addition, the LNG export facility is located far from the battlefields of Russia and Ukraine.

The Japanese government and utilities, the buyers of the Sakhalin fuel, may have to share the risk.

other Japanese companies are also in talks with Oman LNG about forward contracts .Japan’s leading oil and gas explorer Inpex Corp a 20-year agreement with the American company Venture Global LNG. The plan is to import 1 million tons per year from the company’s Louisiana project, which is scheduled to begin construction in 2023.

In addition, buyers can exercise the quantity tolerance clause. Generally present in long-term contracts, they allow you to request 5 to 10% additional volumes from other suppliers.

TotalEnergies becomes a member of PJM Interconnection, expanding its trading capabilities in North America's largest wholesale electricity market. The decision strengthens the company's presence in the United States.
Turkey has connected its gas grid to Syria’s and plans to begin supplying gas for power generation in the coming weeks, according to Turkish Energy Minister Alparslan Bayraktar.
Despite record electricity demand, China sees no significant increase in LNG purchases due to high prices and available alternative supplies.
US natural gas production and consumption are expected to reach record highs in 2025, before slightly declining the following year, according to the latest forecasts from the US Energy Information Administration.
Naftogaz announces the launch of a natural gas well with a daily output of 383,000 cubic meters, amid a sharp decline in Ukrainian production following several military strikes on its strategic facilities.
Sonatrach and ENI have signed a $1.35 billion production-sharing agreement aiming to extract 415 million barrels of hydrocarbons in Algeria's Berkine basin, strengthening energy ties between Algiers and Rome.
Maple Creek Energy is soliciting proposals for its advanced 1,300 MW gas project in MISO Zone 6, targeting long-term contracts and strategic co-location partnerships with accelerated connection to the regional power grid.
VMOS signs a USD 2 billion loan to finance the construction of the Vaca Muerta South pipeline, aiming to boost Argentina's energy production while reducing costly natural gas imports.
According to a Wood Mackenzie report, Argentina could achieve daily gas production of 180 million cubic metres per day by 2040, aiming to become a key regional supplier and a significant exporter of liquefied natural gas.
Côte d'Ivoire and the Italian group Eni assess progress on the Baleine energy project, whose third phase plans a daily production of 150,000 barrels of oil and 200 million cubic feet of gas for the Ivorian domestic market.
The extreme heatwave in China has led to a dramatic rise in electricity consumption, while Asia records a significant drop in liquefied natural gas imports amid a tight global energy context.
E.ON, together with MM Neuss, commissions Europe’s first fully automated cogeneration plant, capable of achieving a 91 % fuel-use rate and cutting CO₂ emissions by 22 000 t a year.
Facing the lowest temperatures recorded in 30 years, the Argentine government announces reductions in natural gas supply to industries to meet the exceptional rise in residential energy demand across the country.
Golden Pass LNG, jointly owned by Exxon Mobil and QatarEnergy, has asked US authorities for permission to re-export liquefied natural gas starting October 1, anticipating the imminent launch of its operations in Texas.
Delfin Midstream reserves gas turbine manufacturing capacity with Siemens Energy and initiates an early works programme with Samsung Heavy Industries, ahead of its anticipated final investment decision in the autumn.
Norwegian group DNO ASA signs gas offtake contract with ENGIE and secures USD 500 million financing from a major US bank to guarantee future revenues from its Norwegian gas production.
Golar LNG Limited has completed a private placement of $575mn in convertible bonds due in 2030, using part of the proceeds to repurchase and cancel 2.5 million of its own common shares, thus reducing its share capital.
Shell Canada Energy announces shipment of the first liquefied natural gas cargo from its LNG Canada complex, located in Kitimat, British Columbia, primarily targeting fast-growing Asian economic and energy markets.
The Australian government is considering the establishment of an east coast gas reservation as part of a sweeping review of market rules to ensure supply, with risks of shortages signalled by 2028.
The increase in oil drilling, deepwater exploration, and chemical advances are expected to raise the global drilling fluids market to $10.7bn by 2032, according to Meticulous Research.