By Marwa Rashad
DAVOS, Switzerland (Reuters) -Japan's top LNG buyer, JERA, plans to increase its purchases of liquefied natural gas from the United States to diversify its supply and meet demand growth spurred by data centres and AI, a senior executive told Reuters.
U.S. President Donald Trump pledged to unleash the U.S. energy industry to boost output and threatened the EU with tariffs if the bloc did not buy more gas, meaning JERA might have to compete with other buyers for more U.S. gas.
Handling between 30-35 million metric tons (mt) of LNG annually, Japan's largest utility currently sources nearly half of this from the Asia Pacific region, including Australia, Malaysia and Indonesia.
"This accounts for very high exposure. My plan is to rebalance that and to make our LNG supply portfolio more diversified," Ryosuke Tsugaru, JERA's head of LNG division, told Reuters on the sidelines of the World Economic Forum annual meeting in the Swiss resort of Davos.
"My plan is to increase our exposure to the U.S. energy projects. We are now buying 3.2 million tons in long-term contracts from America which is small against the total purchase amount," he added, without detailing the expected increase.
However, JERA will be watching closely the long-term sustainability of LNG policies in the United States, the world's largest LNG exporter which in 2024 alone shipped 88.3 million tonnes of the super-chilled gas.
Trump ordered the U.S. Energy Department to resume considering applications for LNG exports after the Biden administration froze them.
SEEKING POTENTIAL ALTERNATIVES TO RUSSIA
Tsugaru said that JERA welcomed Trump's policies to accelerate oil and gas production and development of new LNG projects, however long-term sustainability remained key.
"The U.S. is now a major energy supplier to the global market. So we are very much hoping America continues to be reliable and competitive source of supply," he added.
Prioritising supply reliability and affordability, JERA also plans to talk to suppliers in the Middle East "to have a more geographically balanced energy portfolio", he added.
Russian supplies to Japan are vulnerable to sanctions and future growth in Russian LNG has been curtailed, leaving Japan seeking potential alternatives.
JERA has two contracts with Russia's Sakhalin-2 project, a deal for 0.5 million metric tons per annum running until 2026, and for 1.5 million metric tons per annum expiring in 2029.
Tsugaru said he was hopeful of continuing to grow a long-term LNG partnership with Qatar dating back to the 1990s.
Reuters has reported that Qatar was finding it hard to agree new LNG deals with Japan amid rising competition from the U.S. and elsewhere with more flexible contract terms.
"Qatar has their own commercial aspirations and requirement. We do have our own, but leveraging long-term partnership ... I am hopeful to continue and grow long-term LNG partnership with Doha," he said.
Tsugaru said JERA has a more positive view on natural gas demand and energy demand in Japan, driven by emerging demand for stable power, including from data centres and AI.
Asked for his market forecast, he said JERA was "generally bullish" for the 2026 to 2029 period to be "kind of balanced" given that some new LNG projects will be delayed.