Japan power generators facing LNG shortage amid supply crunch, cold weather

1/8/2021

Reuters - JERA, Japan’s biggest electricity generator and the world’s largest buyer of LNG, is operating gas-power plants at lower rates as it runs down inventories amid rising heating demand as temperatures drop.

The company joins other Japanese power generators reducing run rates on their gas plants as they compete with LNG buyers across northern Asia scrambling to secure supplies, sending prices higher.

Tight fuel supplies are also highlighting vulnerabilities in Japan’s electricity grid that make it harder to swap power supplies between areas a decade after the Fukushima nuclear disaster set off government-led changes to prevent such situations.

“We had to lower run rates at some of our gas power plants due to lower stockpiles of LNG,” a JERA spokesman told Reuters by phone on Thursday. “We are trying our best to secure LNG supply through our long-term contracts and the spot market which trades supply to be delivered in about 1.5-2 months.”

The company is also seeking cargoes for quicker delivery and running its coal plants at full capacity, he said.

Kansai Electric Power also faces declining LNG inventories, forcing lower run rates at some of its gas plants, a spokesman said.