Japan to invest additional $10 billion in global LNG infrastructure projects

In response to Japan's announcement on its commitment to invest additional $10 billion in global LNG infrastructure projects at the 8^th  annual Japan LNG Producer-Consumer Conference, Wood Mackenzie research director Nicholas Browne said:

"Previous LNG Producer-Consumer conferences have made the Japanese case for increased flexibility such as removing destination clauses, joint procurement, diversification away from oil indexation, increased transparency and development of Asian LNG hubs. Many of these policy measures have subsequently been realised.

"Japan announced that it is planning to invest an additional US$10 billion to develop infrastructure mainly in new and developing markets in the India sub continent and Southeast Asia, reflecting a shift in priorities. This is an evolution from the spending plan from two years ago which was focused on encouraging new supply sources, and has been largely realised through Japanese investments such as Arctic 2.

"This new $10 billion will include public-sector financing from JBIC (the Japan Bank for International Cooperation), as well as from JOGMEC, the state-backed Japan Oil, Gas and Metals National Corp, in addition to purely commercial groups such as trading houses and banks. The government-owned Nippon Export and Investment Insurance will offer full coverage for LNG-related financing.

"Given the challenging credit rating of many of these markets, having this financing underwritten should reduce the financing costs and help LNG compete with other fuels like coal.

"For Japan, it serves the purpose of growing the global Asian LNG market, and improving liquidity and flexibility. Meanwhile, Japanese companies may also be beneficiaries given their strength in regasification terminal development, gas-to-power and gas infrastructure."