Nippon Steel, the world's second-largest steelmaker, has recently purchased a liquefied natural gas shipment at the highest price ever paid in Japan amid growing fears of disruptions of LNG supplies from Russia.
Nippon bought an LNG cargo for delivery in September at a price of $41 per million British thermal units (mmBtu), most likely supplied by a major trading house, two trading sources said, without giving further details.
"Based on a standard LNGC (liquefied natural gas carrier) sized vessel, the cargo would cost between $132 million and $135 million depending on load tolerance," one of the sources said. This would mark it as the most expensive LNG cargo ever purchased by the country.
Nippon Steel, the nation's top steelmaker, did not immediately respond to a request for comment outside of business hours.
Resource-poor Japan faces a historic energy security risk as tensions with Moscow intensify, heightening the threat of gas supply disruptions at a time when global supply is tight and spot prices are sky-high.
Competition to secure LNG cargoes has intensified since Russia's Feb. 24 invasion of Ukraine, which Moscow calls a special military operation. Europe is buying massive amounts of LNG, further increasing market tightness and elevating prices.
Japan, a top LNG importer, relies mainly on long-term LNG contracts, which are usually much cheaper, but utilities have been forced into the spot market over the past few months to meet summer cooling demand amid above-average summer temperatures and concerns over Russian supply.
Russia has recently seized full control of the Sakhalin-2 gas and oil project in its Far East, in which Shell and Japanese investors hold just under 50%, heightening the threat of gas supply disruptions to Japan.