Japan to offer low-interest loans for LNG supply – Nikkei
TOKYO, September 29 (Reuters) – The Japanese government will provide support through state-owned financial institutions to help utilities secure liquefied natural gas (LNG) amid soaring prices, the Nikkei business daily reported Thursday.
The state-owned Japan Bank for International Cooperation (JBIC) will provide low-interest loans to electric utilities and town gas companies to buy the super chilled fuel in the spot market , the newspaper said, without citing sources.
This decision aims to avoid an energy crisis by offering financial support before winter, when the demand for heating is expected to increase. LNG spot prices remain at high levels amid the risk of supply disruptions from Russia given its war with Ukraine.
Japan’s Industry Minister Yasutoshi Nishimura will announce the loan support at the 2022 LNG Producer-Consumer Conference to be held later Thursday, the Nikkei said.
Japanese utilities buy most of their LNG through long-term contracts, but about 20% comes from the spot market.
Asian LNG spot prices have soared this year, reaching a record high in August, although they have since relaxed due to high inventory levels and government efforts to curb demand in Europe. However, the market fears that a cold winter in Europe could bring prices back to record highs.
Japan imports about 10% of its LNG from Russia, mainly from Sakhalin-2.
It would cost Japan more than 1 trillion yen ($6.9 billion) to buy 6 million tonnes of LNG a year on the spot market if shipments from Russia were completely halted, the Nikkei said. .
($1 = 144.3700 yen)
(Reporting by Yuka Obayashi; Editing by Jamie Freed)
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