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Multiple ships bound for Japan awaiting Indonesia’s pending approval for coal exports: METI

Multiple ships loaded with coal bound for Japan are among 14 ships that could depart Indonesia as soon as a decision on whether to lift the country’s export ban is made Jan. 12, an official with Japan’s Ministry of Economy, Trade and Industry told S&P Global Platts Jan. 11.
The Japanese coal loading information comes as there are currently five vessels loaded with coal among the coal carriers stuck in Indonesia, the METI official said, adding that it was not immediately clear an exact number of vessels bound for Japan on the list of 14 ships.

Noting an improvement in the coal stockpile situation at state-owned PT Perusahaan Listrik Negara, or PLN, and independent power producers, the Indonesian government will allow some vessels to be released for export, according to the minutes of a meeting that was attended by top government officials and PLN, which were seen by Platts.

“As of today, seeing the condition of PLN’s supply is much better, 14 ships that already have a cargo of coal and have been paid for by the buyer can be immediately released for export,” the minutes of the meeting said.

It added that this was subject to verification by the Directorate General of Mineral and Coal and Hubla.

The minutes also noted that a decision on the export ban would be made Jan. 12 following assessments by a cross-ministerial team, which will decide how exports will resume in the context of the fulfillment of domestic market obligations.

Indonesia banned coal exports in January over concerns that low supply of coal at domestic power plants could lead to power outages, according to a letter sent to coal producers by the country’s energy ministry Dec. 31.

The ban was imposed because coal stockpiles at some of state-owned PT Perusahaan Listrik Negara’s power plants have declined to critically low levels, the ministry had said earlier.

Bilateral meeting
Indonesia’s move to ease its coal export ban came to light after METI minister Koichi Hagiuda’s bilateral meeting with Indonesian Energy and Mineral Resources Minister Arifin Tasrif during a visit to Jakarta Jan. 10.

During the meeting, Hagiuda requested Indonesia’s understanding of the need for a swift response to settle situations surrounding its temporary coal export ban, the METI official said.

The METI minister’s move came as Japan is closely watching developments surrounding Indonesia’s announcement of the coal export ban in January, as it coincides with the country’s peak power demand season.

Japan, which imports more than 60% of thermal coal from Australia and 13% from Indonesia, sees limited immediate impact from Indonesia’s latest export ban because of its relatively small exposure. The country also has about one month’s worth of stockpiles held by local power utilities and independent power producers.

Japan’s Electric Power Development Co., or J-POWER, said Jan. 5 it did not expect the ban to have any immediate impact on its thermal coal procurement given its ample stocks and contingency measures, which includes transferring coal between its power plants as well as the possibility of purchasing from another producer, a company spokesperson said.

Currently, J-POWER imports thermal coal mainly from Australia and Indonesia, the spokesperson added.

Japan’s largest power generation company JERA expects to be able to ensure its coal procurements in spite of Indonesia’s temporary ban on exports.

“We expect to be able to cope with the situation from already secured coal [supply] apart from Indonesia, such as Australia for the moment,” a JERA spokesperson said Jan. 5.

Market sources in Japan have also said they are cautiously observing the situation in Indonesia because of the potential impact from local power utilities’ shift to gas-fired power generation.

JERA also said Jan. 11 it plans to restart the 700 MW No. 1 coal-fired unit at its Hekinan thermal power plant on Feb. 19 following an unplanned shutdown on Dec. 16, 2021, due to a glitch on turbine-related facility.

JERA’s Hekinan outage has been subject to market talks in recent weeks on its potential impact on LNG demand.

“We have heard that the Hekinan has been shut since last year because of malfunctioning,” a Japanese trader said. “While there were talks of restart at the end of the year but it did not happen, and their LNG consumption has increased.”

JERA is seriously considering LNG purchase for February, the trader added.
Source: Platts

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