LNG tankers in Yokohama, Japan
Letter from Japan: Power market risks highlight LNG rework
Flexibility and sharing of risk in gas buying and selling is becoming more essential
LNG is a super-chilled commodity but for Japanese buyers it has become a little too hot to handle. Sellers insensitive to the new fundamentals in Japan beware.The familiar pattern was for Japanese power and gas utilities to acquire at least 80–85% of their demand under contracts stretching decades. That is increasingly going out of fashion, and the reasons are not only decarbonisation, a weak yen and trouble securing financing. Arguably the biggest factor is ‘gate closure’. The term refers to a point in time when electricity generators must submit their final expected output to the grid operator, about an hour before delivering on the promise. A day before the electricity is produced, utilit
Also in this section
19 March 2026
The regional crisis highlights the undervalued role of fixed pipelines in the age of tanker flexibility
18 March 2026
Rising LNG exports and AI-driven power demand have raised concerns that US gas prices could climb sharply, but analysts say abundant shale supply and continued productivity gains should keep Henry Hub within a range that preserves the competitiveness of US LNG
18 March 2026
Risks of shortages in oil products may cause world leaders to panic and make mistakes instead of letting the market do what it does best
17 March 2026
The crisis in the Middle East has put LNG’s ability to offer security and flexibility under uncomfortable scrutiny
