Tokyo Gas takes first LNG cargo from Cove Point
Published by Joseph Green,
According to the latest Reuters report, Japan received its first shipment of LNG on 21 May from Dominion Energy Inc’s newly completed Cove Point export plant, the beginning of a jump in imports from the US by the world’s biggest buyer of the fuel.
The docking of the tanker LNG Sakura at Tokyo Gas Co’s Negishi terminal near Tokyo is another marker of shifting global energy flows as the US ramps up exports of gas and oil from shale formations.
The cargo is the first of 2.2 million tpy of LNG Japanese companies are purchasing under long-term contracts from Cove Point in Maryland. A ramp-up of purchases now by Japan may draw some of the sting from President Donald Trump’s criticisms of the Asian nation’s trade imbalance with the US.
“The first cargo from Cove Point could not come at a more timely juncture for Japan in the light of trade tensions,” said Nicholas Browne, senior gas analyst at energy consultancy Wood Mackenzie in Singapore.
“US LNG imports will reduce the trade deficit to an extent, while also helping Japan’s politicians demonstrate they are doing their part,” he said.
Tokyo Gas said in a statement the 177 000 m3 Sakura docked earlier on 21 May and is unloading about 70 000 t of LNG. It passed through the Panama Canal, which was widened in 2016 to allow passage of large LNG tankers.
Tokyo Gas has a contract to buy 1.4 million tpy of Cove Point LNG for 20 years. Kansai Electric Power has contracted to take 800 000 tpy.
Japanese buyers have been buying cargoes on a spot basis from Cheniere Energy Inc’s Sabine Pass terminal in Louisiana, which exported its first cargo in February 2016.
Since then Japanese buyers have imported a little over 1.4 million t of LNG total from the US, paying about 93 billion yen (US$835 million). Japan had previously bought cargoes from Alaska.
US President Donald Trump has singled out Japan and others countries, including China, for running trade surpluses with the US, demanding that they take steps to reduce the perceived imbalance.
To placate Trump, Japanese officials have suggested buying more US energy supplies, although private companies have said they do not have the capacity to take in more.
Japan’s trade surplus with the US was 616 billion yen in April, up 4.7% from the same period a year earlier.
The Cove Point contracts were signed before Trump took office, but any increase in LNG imports may help Japanese officials show Washington they are responding to his demands.
“The start up of Cameron and Freeport LNG (in the US) next year, which also have contracts to Japan will further help,” said Woodmac’s Browne.
Read the article online at: https://www.lngindustry.com/liquefaction/21052018/tokyo-gas-takes-first-lng-cargo-from-cove-point/
You might also like
Equinor provides update on gas leak at Melkøya
Equinor has announced that the gas leak that occurred at the Hammerfest LNG plant at Melkøya on 31 May 2023 has been stopped and normalisation is under way.