Japan’s biggest LNG importer and largest power producer, JERA, has secured its LNG supply through July and will adjust its procurement strategy to be more flexible amid the Middle East conflict that has trapped LNG supply behind the Strait of Hormuz.
“At present, we have sufficient stock to last until July,” Masato Otaki, JERA’s Executive Officer and Head of the Financial Strategy and Planning Division, said on Monday, as carried by Reuters.
“Depending on how long the blockade continues, we will need to adjust our procurement strategy flexibly,” the executive told reporters after JERA reported a 5.2% higher profit for the 2025/2026 financial year ended March 31, 2026, despite lower revenues due to weaker electricity sales pricing.
JERA did not provide an outlook for the current financial year from April 1, 2026 through March 31, 2027, due to the uncertainty in the Middle East.
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“Due to the recent developments in the Middle East and other factors, the outlook for resource prices and fuel procurement remains uncertain,” JERA said.
Amid the loss of supply from the Middle East, JERA and other Asian importers will turn to North American LNG supply, Ryosuke Tsugaru, Jera’s Senior Managing Executive Officer, said last month.
More buyers could be pushed to seek and contract LNG supply from producers outside the Middle East, such as the U.S. and Canada, if a prolonged war continues to choke supply from the Gulf region, Tsugaru told Reuters in March.
A month before the war erupted, Jera signed a long-term LNG sale and purchase agreement with QatarEnergy to secure the supply of 3.0 million tonnes per annum (MTPA) for 27 years, with deliveries expected to commence in 2028.
Jera expects the start of Qatari deliveries could be delayed if the war stalls the expansion of Qatar’s LNG capacity.
“Our exposure to the Middle East is not significant,” Tsugaru told Reuters, adding that “we are considering additional spot purchases to address certain cargo shortfalls.”
By Charles Kennedy for Oilprice.com
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