Japan buys most expensive gas shipment as energy crunch bites
JAPAN bought its most expensive ever natural gas shipment as an escalating global energy crunch brings new risks of blackouts and intensifies competition for fuel imports.
Nippon Steel purchased a liquefied natural gas (LNG) cargo for delivery in September in the low-US$40 per million British thermal units range, according to traders with knowledge of the matter. The cargo is Japan's most expensive ever, they said.
The shipment is likely to cost more than US$135 million, according to Bloomberg calculations, and the exorbitant price shows the premium Japan is being forced to pay as it grapples with strained electricity supplies and high demand. Tokyo has seen 2 major power crunches this year, including during a severe heatwave last month.
A spokesperson for Nippon Steel wasn't immediately able to comment.
Competition for natural gas has been accelerated as the European Union and other allies shun some Russian fuel over the war in Ukraine, and with prices of oil and coal already trading at elevated levels. Japan's Trade Minister Koichi Hagiuda has called on the US and Australia to boost gas exports, but translating that into actual shipments will take time.
Japan is expected to be the world's top LNG importer this year amid a government-led push to maintain high fuel stockpiles and avoid power shortages. The government has also urged industries and homeowners to use less electricity, and is making a new longer-term efforts to restart nuclear reactors. BLOOMBERG
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