Japan has reportedly imported its first cargo of LNG from China in July as utilities from the world’s biggest buyer of the chilled fuel look for new suppliers.
According to Reuters, China has become the world’s second-largest LNG buyer amid a surge in domestic gas usage.
However, the country began to re-export shipments due to a lull in summer gas consumption and Japanese buyers are buying cargoes to reduce their fuel expenses.
Citing industry sources close to the matter, the cargo of 70,560 tonnes of LNG was shipped from the CNOOC-operated Hainan LNG Terminal to Chita near Nagoya where Toho Gas jointly operates an LNG terminal with JERA.
Japanese official trade statistics show that this is the first LNG cargo from China since 1988 when the Japanese government started publishing import and export figures.
It is worth noting that prices for spot LNG in Asia LNG-AS sank to near record lows in recent weeks as a wave of new supply from the United States and Australia comes onto the market.
The decline in spot market prices for liquefied natural gas (LNG) is pushing Japanese utilities in Japan to be more aggressive in price reviews built into traditional long-term contracts linked to oil prices.
To remind, Hokuriku Electric also bought a spot LNG cargo for delivery in November, while Hokkaido Electric is seeking a cargo for delivery the same month.