Japan gas lobby urges stronger diplomacy to drop LNG destination clauses
TOKYO, Dec 20 (Reuters) -The head of the Japan Gas Association on Friday urged the government to enhance diplomatic efforts to eliminate destination clauses in long-term liquefied natural gas (LNG) contracts, ensuring flexibility for resale in response to demand trends.
Japan's industry ministry unveiled a draft of its revised basic energy policy on Tuesday showing LNG-fired power is necessary as a means of energy transition to cleaner energy.
It also said the government and the private sector must jointly secure the necessary long-term LNG contracts in preparation for risks such as price hikes and supply disruptions. Furthermore, natural gas would remain a key energy source even after achieving carbon neutrality, as its use as a raw material for hydrogen and other (clean) fuels would expand.
"The draft met our expectations," Japan Gas Association Chairman Takashi Uchida told at a news conference.
The report also highlighted the need to secure long-term LNG contracts and develop infrastructure such as gas pipelines which will help negotiations between private companies and gas-producing countries for long-term contracts, facilitate financing, and encourage investment in infrastructure, he said.
About half of long-term LNG contracts held by Japan, the world's second-biggest LNG buyer, still have destination clauses, limiting freedom of resale, Uchida said.
"Qatar, for example, has yet to eliminate destination clauses. So we hope our government will conduct stronger resource diplomacy," he said.
Reporting by Yuka Obayashi; Editing by Stephen Coates
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
