Reuters
Japan's
demand for liquefied natural gas (LNG) may grow by more than 10% to some 74
million metric tons by 2040 under a government scenario where the renewable
energy rollout goes slower than expected, a senior industry ministry official
said. Japan's domestic LNG demand continued to fall last year, dropping by 0.4%
to 66 million tons due to a weaker economy, a growing share of renewable
energy, and nuclear power plant restarts. Yuya
Hasegawa, a division director at Japan's Ministry of Economy, Trade and
Industry (METI), told a conference in Tokyo that there is an expectation that
power demand will expand due to the growth of data centres in the country.
"If we do not
have a huge expansion of renewable energy, or if we cannot reduce the cost of
hydrogen, ammonia, CCUS (carbon capture, utilization and storage), our gas
demand will increase," he said. According
to Hasegawa, under an alternative energy strategy scenario being prepared by
METI, Japan's LNG demand will rise to 74 million tons in 2040, or by almost
10%, if renewable energy expansion is not there as other METI scenarios assume.
Australia, Malaysia and the United States are the biggest LNG suppliers to
Japan, but Canada is preparing to start exports to Japan later this year from
the LNG Canada project where Mitsubishi (8058.T), opens new tab is a
shareholder.
With
U.S. President Donald Trump still threatening steep tariffs on Canada,
including on energy imports, Canada is turning its attention to other potential
markets, including Japan, the world's second biggest LNG buyer after China. Trump
has also promised to increase oil and gas production in the U.S., already the
world's biggest, increasing competition among sellers for top buyers, including
for Japan. Canada's
province of Alberta, a source of gas for the yet-to-be-launched LNG Canada
export project, wants to double production for supplies elsewhere, including to
Asia and Japan, Rebecca Schulz, minister of environment and protected areas at
the Government of Alberta, told the same conference in Tokyo.
"Just the
shipping time, half of the time coming from the U.S. Gulf Coast, it makes us a
perfect partner (for Japan)," she said.