Japan's LNG Demand Projected to Surge: Slowed Renewable Energy Rollout
Japan's liquefied natural gas (LNG) demand is expected to increase by over 10% to approximately 74 million metric tons by 2040, according to an alternative energy strategy scenario projected by the Ministry of Economy, Trade and Industry (METI).
This surge is predicated on a slower-than-anticipated rollout of renewable energy sources. Despite ongoing declines in domestic LNG demand, Yuya Hasegawa, a division director at METI, anticipates increased power demand driven by data center expansion.
In the absence of significant renewable energy expansion or cost reductions in hydrogen, ammonia, or carbon capture, utilization, and storage (CCUS) technologies, Hasegawa projects a substantial increase in gas demand.
Australia, Malaysia, and the United States currently dominate LNG supply to Japan, but Canada is poised to enter the market with exports from the LNG Canada project, in which Mitsubishi holds a stake.
Amid trade tensions with the United States, Canada is exploring alternative markets, including Japan, the second-largest LNG importer globally. President Trump's pledges to boost US oil and gas production intensify competition for key buyers like Japan.
Rebecca Schulz, minister of environment and protected areas for the Government of Alberta, Canada's primary gas-producing province, highlights the strategic advantage of Canada's proximity to Japan. The reduced shipping time from Alberta compared to the US Gulf Coast positions Canada as an ideal supply partner for Japan's LNG needs.