Japan has unveiled a draft revision of the gas business law, which would allow the government to issue an order limiting the use of city gas by large firms if the supply-demand balance become tight, as uncertainty is growing over stable imports of LNG. City gas usage restriction will be issued by the government if demand exceed supply even after calling on households and companies to make voluntary savings. The planned revision would also empower the government to procure LNG through Japan Oil, Gas Metals National Corporation (JOGMEC), a state-owned group, on behalf of private companies. The government submitted the draft to the ongoing session of the Diet, the Japanese parliament, which started earlier in October 2022.
In addition, the Japan Bank for International Cooperation (JBIC), a state-owned financial institution, has agreed to provide JERA JPY130bn (US$900m) in loans. This will help the company, which is the largest power utility in Japan with 70 GW of mostly gas-fired capacity, to procure LNG amid a surge in spot price. Japan is the world’s second largest LNG importer after China, with 95 bcm in 2021, accounting for one fifth of the world’s total LNG imports. The country buys most of its LNG through long-term contracts, but around 20% comes from the sport market. In 2021, gas accounted for 22% of Japan’s energy mix and 37% of its power mix.
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