Published: 18:07, January 30, 2024 | Updated: 18:27, January 30, 2024
Japan worried US pause in LNG permits may delay new projects
By Reuters

This June 12, 2014 file photo shows Dominion Energy's Cove Point LNG Terminal in Lusby, Md. (PHOTO / AP)

TOKYO - Japan, the world's second-biggest buyer of liquefied natural gas, is concerned that a temporary suspension of US export permits may delay the launch of new LNG facilities in the United States, industry minister Ken Saito said on Tuesday.

US President Joe Biden last week paused approvals for pending and future applications to export LNG from new projects, a move cheered by climate activists that could delay decisions on new plants until after the Nov 5 election.

"The measure in the US does not affect businesses that have already been approved, so we currently believe that there will be no impact on LNG procurement by Japanese companies," Saito told a regular briefing.

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Imports from the United States jumped last year by 34 percent to 5.5 million metric tones, providing 8 percent of total LNG purchases by Japan in 2023

"On the other hand, some Japanese companies have already concluded offtake contracts for LNG that is scheduled to receive approval and begin production in the US Therefore, we are concerned that the temporary suspension of export permits will delay the start of new LNG production from the US."

Despite gradually cutting LNG imports over the past decade thanks to nuclear power restarts and renewable energy, Japan still relies on LNG for a third of its electricity mix and the role of the United States as a supplier has been increasing.

Imports from the United States jumped last year by 34 percent to 5.5 million metric tones, providing 8 percent of total LNG purchases by Japan in 2023 and making the United States Japan's fourth biggest supplier of the super-cooled gas.

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US officials have said that the pause would not hurt allies, as it has an exemption for national security should they need more LNG.

"We would like to carefully examine the medium to long-term impact of the issue and take necessary steps to ensure that Japan's stable energy supply is not compromised," Saito said.