Tohoku Electric Power Co. has released a tender to purchase a shipment of liquefied natural gas with a clause requesting that the cargo not come from Russia, in what may be the first LNG tender to specifically ban the pariah state.
The utility is seeking a spot LNG cargo for April to May delivery with loading ports excluding Russia, according to traders with knowledge of the matter. The company is in need of more LNG as an earthquake last week knocked offline a coal-fired power plant, boosting its dependence on gas generation.
While most Asian LNG importers have paused buying spot cargoes from Russia since the war in Ukraine began, traders until now haven’t seen a purchase tender that has been so specific in avoiding the country. The move will likely be repeated by buyers across the region, tightening available natural gas supplies just as the market is grappling with a shortage and sky-high prices.
Tohoku Electric's actions in the LNG market follow a similar pattern in Japan’s oil sector, where the nation’s top refiners have said they will stop importing Russian crude. It’s also the latest in a broader retreat as energy giants across the world slash their dependence on Russian fuels.
However, while Japanese buyers are avoiding additional spot purchases of Russian LNG, they are still accepting deliveries via long-term contracts.
Tohoku Electric is shutting out Russian LNG from its tender as it isn’t sure if those shipments may be slapped with sanctions in the future as the war drags on, according to the people, who requested anonymity to discuss private details. So far, a global effort to sanction Russia has largely avoided its energy exports.
The Japanese utility wants the shipment for delivery to ports including Niigata-Higashi Port in Niigata Prefecture, where Russian shipments made up nearly 20% of deliveries last year, the people said.
A spokesman for Tohoku Electric declined to comment.
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