The government has pledged an additional $10 billion (¥1.1 trillion) in public and private financing to liquefied natural gas (LNG) projects worldwide, in order to help spur demand for the cleaner fossil fuel, trade minister Isshu Sugawara said on Thursday.
The investments will be dedicated toward upstream, midstream and downstream LNG projects mainly in Asia, Sugawara said during a keynote speech at the annual LNG Producer-Consumer Conference in Tokyo.
Japan, which has drawn criticism globally for sticking to coal-fired power generation as a major energy source, has been doubling up on efforts to promote the development of the global LNG market in hopes of helping to cut carbon emissions.
The moves also contribute to energy security, a concern highlighted by recent attacks on oil facilities in Saudi Arabia.
At the conference two years ago, the former trade minister, Hiroshige Seko, committed $10 billion in public and private sector financing to LNG projects. But that was dedicated mostly to upstream endeavors such as the Arctic 2 project in Russia, a Shell-led project in Canada and a project in Mozambique, all of which have LNG production capacity of more than 10 million tons per year, according to Takeshi Soda, director of the trade ministry’s international affairs division.
Sugawara also said Thursday that the Japanese government and private firms would offer training to help develop an additional 500 experts able to enter the LNG value chain. The commitment is in addition to nearly 500 experts that Japan has trained over the past few years.
Increasing LNG trading volumes are crucial if Japan wishes to ensure alternative energy supplies are available in times of emergency, such as the Fukushima nuclear disaster in 2011, and to promote competition between producers to promote lower LNG prices, Soda told The Japan Times.
Calls for heightened energy security have grown following the attacks in Saudi Arabia. The incident did not have a major impact on the LNG market in the short term, said Keisuke Sadamori, the International Energy Agency’s director of energy markets and security. But, he added, supplies may be at risk if serious problems were to develop in the Strait of Hormuz — a major route for the transit of oil and gas supplies from Qatar and the United Arab Emirates.
Gas has taken on added importance since the Fukushima disaster led to the shutdown of Japan’s nuclear power sector. The carbon-based fuel now accounts for roughly 40 percent of electricity generation. Japan’s LNG imports hit a record high of 89 million tons in the years following the disaster.
As the world’s biggest importer of LNG, Japan has been working together with the United States to expand the LNG market in Asia to help spur demand for U.S. LNG, which has been rising rapidly.
In 2018, North America accounted for 86 percent of new LNG capacity investments, according to Sadamori at the IEA. But 2019 has already marked the biggest capacity ever sanctioned in a single year, he added, with 85 billion cubic meters of capacity approved — topping the previous record seen in 2005.