Tokyo Gas confident of winter LNG procurement despite Malaysian supply uncertainty: CEO
Japan’s Tokyo Gas cannot rule out experiencing some impact from receiving a winter supply cut notice over its Malaysian term LNG supply, but is confident it can ensure supply during the country’s peak demand season, President and CEO Takashi Uchida said Nov. 26.
“We understand that [the notice] has been sent not just to us but to other companies and countries,” Uchida told reporters. “The companies are still in the midst of negotiation with [Malaysia’s] Petronas so that we cannot say how much impact we will have at this moment.”
“Of course it would not be zero impact,” he added.
The Tokyo Gas CEO’s comments come after Japanese importers that have term contracts with Malaysia’s national oil company Petronas received notices of cancellation and deferral of LNG cargoes scheduled for winter. Discussions are still underway on the extent of the downward quantity tolerances or DQTs, which are supply cuts that can be legally accommodated in sale and purchase contracts.
Tokyo Gas, meanwhile, is procuring LNG early to fill up its maximum tank storage capacity around December in order to ensure its supply for January-March after severe procurement challenges during last winter, Uchida told a press conference.
“We are working with gas-producing countries to receive as much LNG as possible in winter, and we expect to fill up our tanks in around December in order to get through January, February and March,” Uchida said.
“Hence, we will not have any inventory shortage under our current demand estimate, and we expect to be able to come through even in a considerably severe winter.”
Tokyo Gas imported 12.597 million mt of LNG in the fiscal year to March 31, which accounted for 16% of Japan’s total LNG imports. Australia accounted for 51.6% of Tokyo Gas’ imports, followed by Russia at 12.2%, Malaysia 11.4%, the US 8%, Brunei 7.2% and Qatar 6.1%.
Tokyo Gas has a combined 3.61 million kl LNG storage capacity over four import terminals in the eastern Japan, with 950,000 kl at Negishi, 850,000 kl at Ohgishima, 1.35 million kl at Sodegaura and 460,000 kl at Hitachi.