LNG: Japan Utilities Can Replace Sakhalin-2 LNG Supply If Interrupted

Japan’s JERA and Tohoku Electric Power can secure alternative LNG supplies if flows from Russia's Sakhalin-2 are interrupted, according to Reuters citing company executives.

• Russia's Sakhalin-2 LNG supply plays an "extremely important role" in Japan's energy security, according to Japan's new industry minister Ryosei Akazawa, covering about 9% of its LNG imports.
• JERA has two contracts ending in 2026 and 2029, importing about 2mtpa from the project. "There is a good chance that we will be able to do something," including sourcing from the spot market in case Sakhalin supplies need to be replaced, JERA’s Naohiro Maekawa said.
• Tohoku Electric Power is working to diversify supplies to mitigate a risk of a sudden interruption, with around a tenth of its LNG from Sakhalin, senior executive Takayoshi Enomoto said. Tohoku's contract with the project expires in 2030.
• Japan has agreed new US LNG supply deals this year under flexible delivery terms and would enable resales if Japanese demand weakens. Japan has yet to fully commit to the proposed Alaska LNG project.
• The Japanese public and private sectors must work together to secure long-term LNG deals to mitigate the risk of spot price volatility and supply disruptions, according to a revised energy strategy earlier this year.