Japan imported its first LNG cargo from China during July, due to the fact that utilities from the world’s biggest buyer of the fuel search for new suppliers, while also trying to reduce costs amid tough competition.
As Reuters reports, the shipment is indicative of the rising flexibility of the Asian LNG market. China has now become the world’s second-largest LNG buyer, during a growth in domestic gas usage.
However, China has began to re-export shipments amid a quite summer regarding gas consumption. In the meantime, Japanese buyers are scooping up the cargoes to cut their fuel expenses.
The cargo that Japan imported regards 70,560 tonnes of LNG, and was shipped from the Hainan LNG Terminal, operated by state-owned CNOOC Ltd, to Chita near Nagoya, where Toho Gas jointly operates an LNG terminal with JERA.
Namely, it was delivered at $5.68 per million British thermal units (mmBtu), which is below Japan’s average import cost of $9.50 per mmBtu for LNG during July, as the Ministry of Finance data informed earlier this week.
This is considered Japan’s first LNG cargo from China since 1988, when the Japanese government started publishing import and export figures.
Finally, prices for spot LNG in Asia have fallen to near record lows recently, led by a wave of new supply from the US and Australia, which comes into the market.