Industry NewsQatar has announced it is to send an extra 60 cargoes of Liquefied Natural Gas (LNG) to Japan in the next year. The news has raised the prospect of shipments being diverted away from other areas of demand, such as Europe.
Following the earthquake in Japan, there had been concerns that there would be large increase in LNG demand in Japan. While consumption did increase, this had so far been met by Japan's usual supplies. Indeed, it was noted that Europe continued to see strong volumes of LNG being delivered in recent months.
However, Qatar has now confirmed plans to supply Japan with an extra four million tonnes of the fuel over the next 12 months. This would be used to support the utilities in Japan, which continue to struggle with the loss of nuclear capacity and the damage done to the nation's infrastructure. While this could lead to lower flows for Europe, it has been highlighted that Qatar does have spare capacity from recently completed production assets or "trains".
Commenting on the situation, an unnamed LNG trader in Japan told press, "If Qatar diverts to Japan more than 60 cargoes that it had contractually committed to others, that would have a big impact on spot and long-term prices."