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JERA Expands U.S. LNG Purchases Amid Growing Demand and Supply Diversification

JERA, Japan’s largest buyer of liquefied natural gas (LNG), is setting its sights on increasing its imports from the United States. This strategic move aims to diversify its supply sources in response to the rising demand driven by sectors such as data centers and artificial intelligence, as disclosed by a senior executive during the World Economic Forum in Davos, Switzerland.

The U.S. energy landscape has seen significant shifts, particularly under President Donald Trump, who advocated for boosting domestic energy production. This included a warning to the European Union about potential tariffs unless they increased gas purchases, underscoring the competitive environment for U.S. gas exports. Currently, JERA manages an annual LNG intake of approximately 30 to 35 million metric tons, primarily sourcing almost half of this volume from the Asia Pacific region, including countries like Australia, Malaysia, and Indonesia.

Ryosuke Tsugaru, head of the LNG division at JERA, pointed out the need to balance the company’s supply portfolio. “This accounts for very high exposure. My plan is to rebalance that and to make our LNG supply portfolio more diversified,” he noted, adding that while JERA currently has 3.2 million tons allocated in long-term contracts from the U.S., this figure is relatively small compared to their total purchases.

As the world’s largest LNG exporter, the U.S. shipped 88.3 million tonnes in 2024, and JERA is keenly observing the long-term viability of U.S. LNG policies following Trump’s directive for the Energy Department to resume reviewing LNG export applications, following a pause under the Biden administration.

Speaking about the current U.S. administration’s policies, Tsugaru expressed appreciation for initiatives aimed at enhancing oil and gas production, but emphasized the importance of consistent supply. “The U.S. is now a major energy supplier to the global market. So we are very much hoping America continues to be a reliable and competitive source of supply,” he stated.

In addition to U.S. imports, JERA is also engaging with Middle Eastern suppliers to create a more geographically diverse energy mix. Tsugaru expressed optimism about maintaining and enhancing the long-standing LNG partnership with Qatar, which has been in place since the 1990s. Despite facing competition from U.S. suppliers with more flexible contract arrangements, he remains hopeful for future collaborations. “Qatar has their own commercial aspirations and requirements. We do have our own, but leveraging long-term partnership… I am hopeful to continue and grow long-term LNG partnership with Doha,” he remarked.

Looking ahead, Tsugaru’s sentiments regarding natural gas demand in Japan are cautiously optimistic. He noted a predicted rise in energy needs driven by stable power requirements, particularly influenced by the burgeoning data center industry. When asked about future market trends, Tsugaru offered a “generally bullish” outlook for the period between 2026 and 2029, noting that while demand is expected to remain balanced, delays in new LNG projects could impact market dynamics.

As JERA continues to navigate the evolving landscape of global energy supply and demand, its commitment to diversification and strategic partnerships could play a pivotal role in securing stable and sustainable energy sources for Japan’s future.

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