QatarEnergy in talks with Japan on long-term LNG supply deal
- Deal would reaffirm Doha's dominance of Japanese market
- Increased competition has made deals harder to agree
- JERA and Mitsui among those in talks, the sources say
One of the world's biggest liquefied natural gas suppliers, QatarEnergy, is in talks with Japanese firms for a long-term deal to supply LNG from its North Field expansion project, five trading and industry sources told media.
Under the deal, Qatar would supply a consortium of Japanese importers, and a volume of at least 3 metric MMtpy of gas would be split between them, four of the sources said.
If agreed, it would help to confirm Doha's decades-old dominance of the Japanese market, as competition intensifies from the United States and from neighboring Gulf suppliers, the United Arab Emirates and Oman, that offer more flexible contract terms.
It would also be the first deal since it was reported in October that Qatar was finding it hard to agree to LNG term deals with east Asian buyers in Japan and South Korea due to competition.
The buyers in talks with QatarEnergy include JERA, Japan's largest power generator and trading house Mitsui & Co., said four of the sources, who declined to be identified as they were not authorized to speak to the media.
QatarEnergy did not immediately respond to a request for comment, while JERA said it is in discussions with various suppliers for LNG procurement. It recognized Qatar as an important supplier, but said it would not disclose specific details of its discussions.
At an earnings briefing on Monday, a JERA executive said the company needed to diversify its sources of supply.
"Asia-Oceania currently accounts for more than half of our procurement sources. For supply stability, expanding options to regions like North America and the Middle East would be beneficial," Naohiro Maekawa, head of the financial strategy and planning division, said.
When asked if the company is in talks with QatarEnergy over a long-term LNG contract, Mitsui said it is in discussions with various sellers to ensure stable LNG supply, but would not provide details of individual discussions.
North field expansion. Qatar was the third largest LNG exporter globally after the U.S. and Australia last year, exporting 79.54 MM tonnes (t) of LNG in 2024, according to data from analytics firm Kpler.
The Middle Eastern country is planning for an 85% expansion in LNG output from its North Field's current 77 MMtpy to 142 MMtpy by 2030, from a previously expected 126 MMtpy.
Japan is the world's second biggest LNG buyer after China, with its trade data showing imports of 65.89 MMt of the fuel last year.
Qatar had been among Japan's top three LNG suppliers a decade ago, shipping 15 MMtpy–16 MMtpy to the East Asian country between 2012 and 2014.
The surge followed Qatar's support in ramping up LNG exports after the 2011 earthquake and tsunami triggered the Fukushima nuclear disaster, leading to the gradual shutdown of all Japanese nuclear reactors.
But those volumes have since shrunk, as Japan's nuclear reactors have slowly restarted. JERA also chose not to renew its long-term contract with Qatar for 5.5 MMtpy, which expired at the end of 2021. Qatar exported just under 3 MMt to Japan last year, Kpler data showed.
A senior JERA executive said in January that his company planned to increase its LNG purchases from the United States to diversify its supply and meet demand growth spurred by data centers and AI and also plans to talk to suppliers in the Middle East to help diversify its suppliers.
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