Japan’s JERA Signs 20-Year LNG Deal With Malaysia’s Petronas as Country Ramps Up Coal Generation

Japan’s JERA signed a 20-year contract to purchase 2 million tons of liquefied natural gas each year from Malaysia’s Petronas beginning in 2028. The agreement adds to earlier supply deals by JERA, the world’s largest LNG buyer. Malaysia is Japan’s second-largest LNG supplier after Australia and accounted for 15 percent of Japan’s total LNG imports, according to Reuters.

Prime Minister Sanae Takaichi made the announcement after meeting Malaysia’s Premier Anwar Ibrahim. “Amid growing uncertainty in the international energy situation, cooperation with Malaysia, a stable supplier of LNG to Japan, is becoming increasingly important,” she said. Japan is one of the world’s most energy import-dependent countries.

Much of its oil and gas previously came from the Middle East, but war-related disruptions have prompted efforts to secure alternative supplies. Japan’s energy demand is rising this summer as high temperatures increase air-conditioning use. The country has already increased coal-fired generation because of tighter Middle East gas supplies.

U.S. imports and one-third of its total LNG purchases.

Morgan Stanley said earlier this week that Asian LNG prices could reach $25 per million British thermal units this summer because of rising demand and European storage refill needs.