The largest buyer of liquefied natural gas (LNG) says there is a risk of increased market volatility this year. Bloomberg reports. According to Jera Co. President Yukio Kani. the low LNG prices are currently largely due to the mild winter and lower demand from China due to the coronavirus measures in place for some time.
Kani thinks liquefied natural gas prices will rise next winter due to increased import capacity and Europe and China. According to the president of Jera Co. no chance for buyers to “let their guard down”.
Decrease in demand
Jera Co., a company of Tokyo Electric Power Co Holdings Inc. and Chubu Electric Power Co, announced on Friday that they have entered into a 2-year agreement to purchase LNG from Venture Global LNG Inc.’s proposed terminal in Louisiana.
While the company expects Japanese LNG demand to decline over the next decade, it could surprise by remaining flat as more data centers and semiconductor factories are built, Kani says. “These two facilities consume electricity, which makes it difficult to read the demand outlook,” she said.
ammonia and hydrogen
Jera Co. also supports Japan’s plans to use ammonia and hydrogen to decarbonize existing thermal power plants. The strategy has met opposition from other countries, most recently at the Group of Seven meeting of energy and environment ministers.
Using ammonia for power generation can create significant demand that warrants supply chain investment, similar to how Japan helped birth the LNG industry 50 years ago, Kani said.
Source: BNR
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