Japan's LNG stocks are above the 5-year average and buyers want more cargoes
The data showed that the liquefied gas stocks held by Japan's major electric utilities increased 14% from the previous week to 2,09 million tons on Sept. 8. This is above the average five-year figure for this time of year.
Rystad Energy's analyst stated that buyers wanted to buy more cargoes in September due to the forecast of temperatures above average until early October, especially for Japan and South Korea.
Japan, second largest LNG buyer in the world after China, relies mainly on long-term LNG contracts but also uses the spot market to meet peak demand for LNG during cold and hot weather.
In a research report published on Wednesday, Masanori Odaka said that Japan's JERA, and Kansai, are looking for additional LNG to be delivered in September. This is a relatively quick delivery and will likely command a small premium over the current market price due to the limited supply.
JERA and Kansai, Japan's largest power generator and top buyer of LNG, did not respond to comments immediately.
According to Japan's Ministry of Economy, Trade, and Industry, the five-year average of Japan's LNG stockpile for this time of year was 1,99 million tons.
The data revealed that the LNG stocks held by the major electric utilities were 1,83 million tons in the week prior, which was below the average five-year level of 2,02 million tons at this time of year.
The survey conducted by the Ministry of Public Utilities is the basis for the data.
As the hot weather continued to prevail across the country, the demand for air conditioning increased.
Plant outages will affect gas demand in this month. Odaka reports that a 595-megawatt unit at JERA’s gas-fired Joetsu facility went offline on September 9 due to electrical equipment issues, and a Shin-Nagoya gas-fired unit was offline but expected to be operational by Sept. 23.
Odaka's letter stated that JERA's Yokosuka coal-fired unit, which is 650 MW in size, has been off-line since September 4 due to an equipment failure. There is currently no scheduled restart date. (Reporting and editing by SonaliPaul; KatyaGolubkova)
(source: Reuters)
