At least one US LNG cargo has been diverted to Japan from South Korea recently for delivery at end-July amid low inventory concerns, according to S&P Global Commodities at Sea data.

The US LNG cargo loaded on the BP-operated British Listener, which left the Freeport terminal in Texas June 30, is now heading to JERA’s Chita terminal in central Japan, estimated to arrive July 31 after having been previously directed to Kogas’ Incheon terminal and set to arrive July 23, according to CAS(opens in a new tab).

A JERA spokesperson declined to comment on an individual trade July 15. Kogas officials declined to confirm that the Freeport LNG cargo’s diversion to JERA was part of an LNG cargo swap under cooperation initiatives.

However, a separate Kogas official told Platts, part of S&P Global Commodity Insights, that Kogas “recently pushed for LNG volume swap successfully with JERA so as to boost LNG supply stability.”

The latest move comes after JERA and Kogas had previously carried out LNG cargo swaps as part of a trial announced at last year’s LNG Producer-Consumer Conference in Hiroshima in October, based on their respective procurement and inventory situations.

A BP spokesperson declined to comment July 16, on the Freeport LNG cargo loaded on the British Listener as a commercial matter.

In April 2022, Kogas signed a deal with BP Singapore Ltd to import 1.58 million mt/year of US-produced LNG from BP for 18 years from 2025.

Depleting inventory

In early July, market sources said that JERA has been looking to buy some spot LNG cargoes around end-July to early August. Japan’s Organization for Cross-Regional Coordination of Transmission Operators said July 1 that it had directed Kansai Transmission and Distribution to receive up to 1.49 GW of additional supply from Chubu Electric Power Grid over 2:30-5 pm local time (0530-0800 GMT) and another maximum 330 MW over 5-6:30 pm to ensure stable supply.

The latest survey conducted by the OCCTO showed July 11 that Japan’s fuel inventory for power generation is expected to reach its minimum level on July 27, based on stock monitoring conducted by the OCCTO for the July 26-Sept. 11 period.

Data monitored by the OCCTO — comprising all power companies in Japan — showed that the country’s fuel stocks are set to reach 10.393 TWh on July 27, equivalent to a four-day average of electricity consumption, should power demand remain at the 30-year average.

An OCCTO spokesperson told Platts that “the minimum date of July 27 is likely due to a temporary increase in fuel consumption caused by high demand in July.”

Japan’s LNG stocks held by major power utilities dropped 7% week over week to a seven-week low of 2 million mt July 6, the Ministry of Economy, Trade and Industry said on July 9.
Source: Platts