Japan, the world’s second-biggest buyer of liquefied natural gas (LNG), is concerned that a temporary suspension of U.S. export permits may delay the launch of new LNG facilities in the United States, industry minister Ken Saito said on Tuesday.
U.S. President Joe Biden last week paused approvals for pending and future applications to export LNG from new projects, a move cheered by climate activists that could delay decisions on new plants until after the Nov. 5 election.
“The measure in the U.S. does not affect businesses that have already been approved, so we currently believe that there will be no impact on LNG procurement by Japanese companies,” Saito told a regular briefing.
“On the other hand, some Japanese companies have already concluded offtake contracts for LNG that is scheduled to receive approval and begin production in the U.S. Therefore, we are concerned that the temporary suspension of export permits will delay the start of new LNG production from the U.S.”
Despite gradually cutting LNG imports over the past decade thanks to nuclear power restarts and renewable energy, Japan still relies on LNG for a third of its electricity mix and the role of the United States as a supplier has been increasing.
Imports from the United States jumped last year by 34% to 5.5 million metric tones, providing 8% of total LNG purchases by Japan in 2023 and making the United States Japan’s fourth biggest supplier of the super-cooled gas.
U.S. officials have said that the pause would not hurt allies, as it has an exemption for national security should they need more LNG.
“We would like to carefully examine the medium to long-term impact of the issue and take necessary steps to ensure that Japan’s stable energy supply is not compromised,” Saito said.
(Reporting by Kaori Kaneko. Writing by Katya Golubkova. Editing by Sam Holmes)