Japan’s Senior Ministry Official shared that the country’s liquefied natural gas (LNG) demand is projected to surge by over 10% to around 74 million metric tons by 2040, should the renewable energy deployment progress slower than anticipated.
The decline in Japan’s domestic LNG demand last year, decreasing by 0.4% to 66 million tons, was attributed to a sluggish economy, a rising portion of renewable energy sources, and the relaunch of nuclear power plants.
Yuya Hasegawa, a division director at Japan's Ministry of Economy, Trade and Industry (METI), highlighted at a Tokyo conference an anticipation of amplified power requirements due to the proliferation of data centers in the nation.
Hasegawa noted that if renewable energy fails to expand significantly or if the costs of hydrogen, ammonia, and CCUS (carbon capture, utilization, and storage) are not reduced, gas demand will escalate.
In a scenario developed by METI focusing on alternative energy strategies, it is forecasted that Japan’s LNG demand could reach 74 million tons by 2040, marking an increase of nearly 10%, in the absence of significant growth in renewable energy as assumed in other METI scenarios.
Major LNG suppliers to Japan are Australia, Malaysia, and the United States, while Canada is gearing up to initiate exports to Japan from the LNG Canada project, in which Mitsubishi has a stake.
Canada, redirecting its focus to markets like Japan amidst concerns raised by U.S. President Donald Trump on Canadian energy imports, aims to tap into potential opportunities. Trump’s pledge to boost oil and gas production in the U.S. intensifies competition among suppliers for key buyers, including Japan.
Alberta, a significant gas source for the forthcoming LNG Canada export initiative, plans to double production for exports to Asia and particularly Japan. Rebecca Schulz, Minister of Environment and Protected Areas at the Government of Alberta, underscored the advantageous shipping appeal, emphasizing the proximity from the U.S. Gulf Coast to Japan as a strategic partnership in the making.