Qatar, a major player in the global liquefied natural gas (LNG) market, is intensifying its relations with Japan to ensure a lasting energy partnership. This week, Saad al-Kaabi, Qatar's Minister of State for Energy Affairs, traveled to Tokyo to meet with executives of major Japanese companies. Among them, JERA, Chubu Electric, Mitsui, Marubeni, and Kansai Electric, all consumers or partners of Qatari gas projects. The meeting aimed to explore possibilities for strengthening energy relations, as several LNG contracts between Qatar and Japan are set to expire in the coming years.
Qatar has long been one of Japan's main LNG suppliers, but its share of supply has declined in recent years. In 2022, Qatari LNG only represented 4% of Japanese imports of this resource, compared to 12% the previous year. This drop is attributed to the decision of Japanese companies to let several contracts with Qatar expire, for a total volume exceeding 7 million tonnes per year, in particular due to differences on contractual flexibility and uncertainties linked to Japan's climate objectives for 2050.
LNG contracts at the end of the cycle
The late 2020s and early 2030s mark a key period for contracts between Japan and Qatar. Kansai Electric, for example, will see its 500,000 tonnes per year contract expire in 2027, while JERA, Japan's largest power producer, will see its 700,000 tonnes per year contract expire in 2028. For Tohoku Electric, another buyer of Qatari LNG, the contract will end in 2030. Following the ministerial visit, some Japanese companies could be tempted to renew their contracts or sign new ones in order to stabilize their supplies.
For economist Takayuki Nogami of the Japan Organization for Metals and Energy Security (JOGMEC), Qatar could attract Japan by offering more flexible partnerships. However, according to Nogami, the success of these negotiations will depend on discussions on clauses restricting destinations and contract periods.
The strategic role of Qatari LNG for Japan and South Korea
Qatari LNG remains a strategic resource for Japan, a country heavily dependent on imports to meet its energy demand. In a tense geopolitical context and energy transition, the two nations could strengthen their cooperation, not only in LNG but also in sectors such as renewable energies and hydrogen. Japan also imported 293,598 tonnes of Qatari LNG last September, representing 5.4% of its total LNG imports for the month.
The Qatari minister's Asian tour also included a stopover in South Korea, where he met his Korean counterpart Ahn Duk-geun, Minister of Trade, Industry and Energy. Discussions focused on stabilizing LNG supplies and prospects for increased cooperation, including renewable energy and hydrogen. With 8.6 million tonnes of LNG imported in 2023, South Korea is among Qatar's main customers, although the country has recently diversified its supplies to Australia.
Qatar's North Field gas field expansion project
To meet growing global demand and the energy needs of partners like Japan and South Korea, Qatar has launched a massive expansion of its North Field gas field. This initiative, divided into North Field East, South and West projects, is expected to enable Qatar to increase its LNG production capacity from 77 million tonnes to 142 million tonnes per year by 2030. With this expansion, Qatar seeks to strengthen its role in the LNG sector and offer alternatives to Asian markets in the face of geopolitical tensions.
Japan, seeking energy security in a context of transition to low-carbon energies, could take advantage of this expansion to diversify its supplies. However, the adoption of more flexible clauses and conditions adapted to new climate challenges remains crucial for Japanese companies.
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