Tokyo Gas says Mideast escalation unlikely to affect LNG volumes

Tokyo Gas 9531.T, Japan’s top city gas supplier, does not buy any liquefied natural gas from the Middle East, so its procurement volumes will not be affected if Israel’s war with Hamas widens, a company executive said on Thursday.

Israel’s military is poised assault Hamas hold-outs in the southern Gaza Strip city of Rafah despite international warnings of a humanitarian catastrophe, which could escalate tensions in the major oil producing region.

While there have been no signs of direct conflict between Israel and Hamas-supporter Iran since they exchanged attacks this month, Iran has threatened to close the Strait of Hormuz, which is a key route for energy supplies, if it deems necessary to protect itself from Israel.

“We anticipate no impact on LNG procurement volumes even if the situation in the Middle East worsens as we buy no LNG from the region,” Tokyo Gas CFO Taku Minami told reporters.

The company buys only a small amount of liquefied petroleum gas (LPG) which is used to adjust the calorific value of the natural gas, he added.
“We are not taking any special measures to prepare for supply disruptions,” he said.
However, escalated conflicts in the region could push LNG prices to track higher oil prices, Minami said.

“If the situation in the Middle East gets worse, crude oil prices will naturally jump, which could boost LNG prices,” Minami said, noting some of the company’s long-term LNG contracts are linked to oil prices.

Japan is the world’s biggest importer of the super-chilled fuel after China and Tokyo Gas is a major buyer.
Source: Reuters (Reporting by Yuka Obayashi; editing by Miral Fahmy)