Japanese importers of liquefied natural gas (LNG) are preparing for potential disruptions in long-term supplies from one of the world’s leading exporters—Australia.
As Australians head to the polls on May 3, the outcome of the election could impact LNG exports. Whichever party wins, there are concerns that Australia may export less LNG than it has in the past. The country has been struggling with a potential domestic gas shortage, exacerbated by prioritizing exports over local supply, making it a major issue in the election campaign.
Under the current Labor government, price caps on gas and policies favoring domestic supply over exports have raised concerns within the industry. Executives warn that these measures could threaten future investments in new gas projects.
Additionally, the Labor Party has focused on reducing carbon emissions, promising billions in subsidies for solar, batteries, and other green energy initiatives. While the government has stated its support for gas as a backup energy source in the long term, the strong emphasis on emissions reduction could result in policies that may limit LNG exports.
Japan is the largest buyer of Australian LNG, and Japanese companies also hold stakes in LNG projects in Australia. Over recent years, Australia’s share of Japan’s total LNG imports has grown significantly. In 2012, Japan sourced 18% of its LNG from Australia, but by 2023, this figure had risen to 42%.
In 2023, Japan imported a third of Australia’s total LNG exports, amounting to 81 million metric tons, according to Kpler data. However, with the election approaching, Japanese LNG buyers are looking to diversify their sources of supply. JERA, Japan’s largest LNG buyer, stated that this move is part of their strategy to reduce risk and secure reliable, affordable energy for the country.
Related Topics: