Tokyo Gas Co. is in discussions with multiple U.S. liquefied natural gas suppliers to secure a long-term purchase agreement, as rising energy demand leaves Japan increasingly dependent on the fuel source.
Asian spot LNG prices have risen in the winter period, but not enough to keep a wide enough premium to Europe’s benchmark prices to incentivize selling U.S. cargoes to Asia, according to shipping data and analysts.
The United States has become the largest LNG exporter in the world in a few short years and it also became the biggest supplier to the European after 2022 and the suspension of most Russian pipeline flows. Before 2022, U.S. LNG exports to the continent averaged 15 million tons per year, but they jumped to 55 million tons in both 2022 and 2023.
With European inventories depleting fast and now sitting below the five-year average for this point during the winter season, Europe will need to boost overseas supply not only for this winter’s consumption, but also in the spring and summer, to fill up storage sites ahead of the 2025/2026 winter.