LNG stocks Fall 18% on Week, Lowest This Winter

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  • LNG stocks fall below earlier winter low of 1.63 mil mt on Feb 6
  • Japan diverting surplus LNG cargoes to Europe on EU, US requests
  • Kyushu Electric imposes fuel restrictions at Shin Oita gas-fired plant

LNG stocks held by Japan’s major power utilities fell 18% week on week to 1.47 million mt March 6, the lowest to date this winter and down from 1.8 million mt the week before, reports Platts quoting data released March 9 by the Ministry of Economy, Trade and Industry.

Ensuring stable LNG supply

The latest data highlights Japan’s challenge of ensuring stable LNG supply during the winter power demand season.

METI does not have directly comparable data for the same week in 2021, but at the end of March 2021 stocks stood at 2.41 million mt, while the four-year average for end-March is 2.19 million mt, the data showed.

The March 9 LNG stocks were below the previous low for this winter of 1.63 million mt Feb. 6.

The low LNG stocks come after Japan announced Feb. 9 that it would divert some surplus LNG cargoes to Europe, where there were gas shortages, following requests from the EU and the US.

METI minister Koichi Hagiuda said at the time that Japan was diverting a couple of destination-free LNG cargoes in February and would divert more LNG cargoes in March to Europe while ensuring stable domestic LNG supply.

Fuel restrictions

Kyushu Electric imposed fuel restrictions at its No. 1-3 gas-fired combined cycle units at the Shin Oita power plant March 9, the company said in a filing to the Hatsuden Joho Kokai System, or HJKS.

This marks Kyushu Electric’s first fuel restrictions this winter, a company spokesperson said.

The company has imposed fuel restrictions at 12 combined cycle units at the Shin Oita plant, which has 14 such units. The fuel restrictions at the No. 1-1, No. 1-2, No. 1-3, No. 1-4, No. 1-5, No. 1-6, No. 2-3, No. 2-4, No. 3-1, No. 3-2, No. 3-3 and No. 3-4 gas-fired units will last until March 27, the company said.

Kyushu Electric was forced to impose the fuel restrictions at the Shin Oita power plant because it had seen stronger-than-expected LNG consumption for gas-fired power generation over February-early March, the spokesperson said.

Kyushu Electric’s fuel restrictions were attributable to increased LNG use as a result of reduced electricity supply from J-POWER’s unplanned coal-fired power outage, as well as receiving 10,000 mt less LNG than planned in mid-March from a supplier as a result of a production slump, the spokesperson said.

Kyushu Electric also sold a mid-March Ichthys-origin LNG cargo in mid-January, two sources familiar with the matter said.

Kyushu Electric’s Shin Oita No. 1 combined cycle units each have a capacity of 120 MW and the No. 2 combined cycle units 230 MW capacity each. The Shin Oita No. 3-1, No. 3-2 and No. 3-3 combined cycle units each have 245 MW capacity, and the No. 3-4 unit 500 MW.

Kyushu Electric has a combined 460,000 kl LNG storage capacity at the Oita import terminal.

Meanwhile, Shikoku Electric also said March 9 it will impose fuel restrictions at the Sakaide gas-fired units over March 11-31 as part of its precautionary measures to use its fuel effectively because it only has one 180,000 kl LNG storage tank at the Sakaide import terminal.

As part of fuel restrictions, Shikoku Electric plans to shut the 296 MW No. 1 unit on March 11 and cut output from March 11 at the 289 MW No. 2 and the 350 MW No. 4 unit at the Sakaide power plant until March 31.

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Source: Platts

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