Inpex 1605.T, Japan’s top oil and gas producer, is interested in buying liquefied natural gas (LNG) from the United States linked to the Henry Hub prices, Chief Executive Takayuki Ueda told on Wednesday.
Japan is the world’s second biggest LNG buyer after China, but its imports have been declining due to a switch to renewable energy, as well as nuclear reactors restarts. Japan has also been replacing LNG from Russia with cheaper U.S. supplies.
“United States LNG contract do have some cancellation clauses which are completely different from the kind of take-or-pay contract. So I think such kind of flexibility seems to be very much important,” Ueda said on the sidelines of the Gastech conference in Singapore.
As its energy mix is changing, Japan has been pressing for more flexible LNG supply contracts, including the elimination of the destination clause, which is an obligation not to switch the final buyer.
“United States LNG seems to have a lot of flexibility. For example, I think one advantage of the U.S. energy is the prices linked to the Henry Hub,” Ueda added.
He expects no big spikes in the LNG prices during the winter months, adding that Japan’s energy demand is stable in both short and long term.
In January, Ueda said Inpex aimed to accelerate expansion of production and sales of LNG because the market was seen remaining tight in the mid-term. Inpex would explore the areas surrounding the Ichthys project in Australia for additional gas sources and consider an expansion around 2030, he said at the time.
The Ichthys LNG project operated by Inpex is expected to increase production to 9.2 million metric tons this year from 7.8 million tons last year when maintenance reduced output.
Ueda said no major maintenance was planned at its plants this year and next, but the company was planning large-scale shutdowns in 2025.
Source: Hellenic Shipping News
