Japan and Qatar strengthen energy cooperation amid global LNG market tensions

Qatar s Emir Sheikh Tamim bin Hamad al Thani Fumio Kishida japan 18969e3e691 large
Image credit: AFP

Japanese Prime Minister Fumio Kishida has concluded his Gulf tour with a key meeting in Qatar, where he held talks with Emir Sheikh Tamim bin Hamad al-Thani. The two leaders pledged to upgrade their bilateral relations from comprehensive to strategic, specifically focusing on areas such as energy, economy, defence, security, and academic exchange.

The visit, which also encompassed stops in Saudi Arabia and the United Arab Emirates, sought to secure vital energy supplies for Japan and promote the country’s advanced technology. The backdrop of these discussions is a tightened global liquefied natural gas (LNG) market, triggered by Russia’s invasion of Ukraine in February 2022.

Throughout his tour, Kishida was under significant pressure from Japan’s gas lobby to secure new LNG sources. The stakes are high as Japan relies heavily on oil and gas imports, and it did not renew several long-term LNG contracts with Qatar, a leading LNG exporter, in 2021 and 2022. Consequently, the country has seen a significant reduction in its gas imports.

Although no new LNG deals were announced during the visit, Kishida emphasised the importance of LNG as a key energy source for Asia and noted Japan’s role in securing a G7 consensus on the significance of investments in natural gas and LNG. This dialogue, he argued, is based on the understanding that such energy investments are vital for the G7 countries in the mid- to long-term.

The Prime Minister’s Gulf tour took place against a backdrop of intensified competition for LNG resources, with Europe needing large quantities to replace Russian piped gas after the Ukraine invasion. Notably, several Asian buyers, including Chinese importers, have signed long-term LNG contracts with Qatar recently.

A document released by the Japanese foreign ministry underscored the importance of Japan’s coordination with Qatar in stabilising the global LNG markets. Meanwhile, QatarEnergy anticipates that it will sign supply contracts for nearly all the volumes from the new North Field expansion in 2023. This project is expected to boost Qatar’s gas production by over 60%.

Earlier in his trip, Kishida had successful engagements with Saudi Arabia, where Riyadh confirmed its commitment to securing oil supplies for Japan. Additionally, they agreed to continue collaboration on clean hydrogen, ammonia, and recycled carbon fuels. A meeting in Abu Dhabi resulted in an agreement on a new scheme to speed up energy security and a framework that allows the UAE to invest in Japan’s chip and battery technology.

The recent tour underlines Japan’s proactive approach to secure energy resources and promote its technology. As the world faces an increasingly complex energy landscape, strengthening alliances with key energy producers like Qatar remains a strategic priority.

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