by Emily Chow and Yuka Obayashi
SINGAPORE/TOKYO (Reuters) – States across Asia are stepping up natural gas storage policies to avoid another supply shock similar to 2022.
The invasion of Ukraine by Russia had caused the price of liquefied natural gas (LNG), of which Asia is a major consumer, to soar.
Japanese Industry Minister Yasutoshi Nishimura said on Tuesday that the country, the world’s largest importer of LNG, would launch an LNG reserve system this year to secure gas resources.
This reserve would be similar to Japan’s strategic petroleum reserve, one of the largest in the world.
Japan’s Ministry of Economy, Trade and Industry (METI) is selecting companies to purchase and store LNG, with a target volume of around 70,000 tonnes of LNG per month between December and February, a ministry official told Reuters.
In India, the chairman of the Petroleum and Natural Gas Regulatory Council said earlier this month that the country should build natural gas storage facilities to build up stocks when prices are low.
In early July, China’s state-owned CNOOC completed the second phase of construction of a 10 billion cubic meter capacity gas storage project in Guangdong province, according to state media Global Times.
China also announced in March 2022 that it wanted to more than double its gas and LNG storage capacity to reach 55 to 60 billion m3 by 2025, i.e. 13% of its total gas consumption.
South Korea and Taiwan, the world’s third and fourth largest LNG importers respectively, also want to increase their gas stocks.
Taiwan’s state-owned CPC Corp currently holds about 11 days of Taiwan’s gas consumption, a term that will increase to at least 14 days in 2027, the economic affairs ministry said on Friday.
South Korea is building a sixth LNG storage facility in the western port city of Dangjin.
The country has nine days of winter LNG consumption in storage, and is keeping a “large amount” of gas on top of those reserves, a South Korean official familiar with the matter said.
(Reporting Yuka Obayashi, Andrew Hayley, Joyce Lee, Ben Blanchard, Nidhi Verma, writing Emily Chow, Corentin Chapron, editing by Kate Entringer)
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