Japan to break dependence from Middle East oil with $10bn LNG investment
Japan could invest up to $10 billion to advance wider use of LNG globally to alleviate the potential effects of heavy reliance on oil from the Middle East.
Industry minister Isshu Sugawara is set to present the plan that includes funding such projects as processing plants, receiving terminals, and power generation.
The $10 billion investment will include public-sector financing from the Japan Bank for International Cooperation, as well as investment from the state-backed Japan Oil, Gas and Metals National Corp., along with trading houses and financial institutions.
According to a report from the Nikkei Asian Review, the government-owned Nippon Export and Investment Insurance will offer full coverage for LNG-related financing provided by foreign funds and other institutional investors.
The fuel enables energy importers to reduce their traditional reliance on crude oil from countries clustered in the Middle East, where U.S. sanctions on Iran and the recent drone attack on Saudi oil facilities raised questions about the supply outlook. Japan sources nearly 90 percent of oil from the region.
With LNG, the supply risk is spread out. Namely, the Middle East accounts for 60 percent of global net exports of crude oil but just 20 percent of net LNG exports. LNG can be sourced from other locations such as Russia, Australia, African nations, as well as the U.S.
Japan will also layout plans to train 500 experts in such areas as LNG receiving technology and drafting of environmental regulations, in anticipation of stronger demand for the fuel.
The government previously promised $10 billion of support at the 2017 conference. It met this target with four large-scale projects, including LNG Canada – a joint venture of Mitsubishi, Shell, Petronas, PetroChina, and Korea Gas – and Novatek’s Arctic-2 project, partly funded by Mitsui & Co.
LNG World News Staff