Tokyo Gas, Japan’s largest city-gas supplier, announced on Wednesday that it anticipates no direct impact on its liquefied natural gas (LNG) procurement operations as a result of the ongoing conflict between Iran and Israel.
This assessment was shared by the company’s senior managing executive officer Nobuhiro Sugesawa to Reuters in a report, providing clarity amidst global concerns about potential disruptions to energy supplies in the volatile Middle East region.
The statement from Tokyo Gas is significant given the geopolitical sensitivities surrounding the Strait of Hormuz, a critical chokepoint for global oil and gas shipments, and the broader implications of regional instability on energy markets.
While the conflict has raised anxieties about potential supply chain interruptions and price volatility, Tokyo Gas’s executive’s comments suggest that the company’s diversified procurement strategy or existing contractual arrangements are robust enough to buffer against immediate direct consequences.
This news offers a degree of reassurance to investors and energy consumers in Japan, a nation highly dependent on imported LNG to meet its energy demands.
No direct impact
Sugesawa was quoted as saying in the report:
Since we don’t import LNG from Qatar or UAE, our LNG procurement is not directly affected at this time.
“But we are monitoring the situation with the utmost interest,” he said, noting that escalating tensions in the Middle East could drive up LNG prices and disrupt global supply.
The protracted air war between Iran and Israel entered its sixth day on Wednesday, escalating fears of a broader regional conflict.
The intensity of the hostilities has drawn international attention, with global powers urging de-escalation.
Despite not being an active participant in the fighting, US President Donald Trump on Tuesday issued a stark demand for Iran’s “unconditional surrender.”
This assertive stance by the US, a key ally of Israel, adds another layer of complexity to the already volatile situation and raises questions about potential future interventions or diplomatic pressures.
The ongoing aerial exchanges have inflicted significant damage and casualties on both sides, further fueling animosity and making a swift resolution increasingly difficult.
More LNG from US
Sugesawa indicated that the utility is considering an increase in its procurement of resources from the US.
This strategic shift is largely due to the perception of the US as a highly attractive and reliable source of supply.
Currently, the United States contributes approximately 10% of the utility’s total supply, a figure that Sugesawa suggests could see a significant rise in the near future.
This potential increase underscores a broader effort by the utility to diversify and secure its supply chains, leveraging what it views as a stable and robust market in the US.
Last week, JERA, Japan’s largest power generator, announced agreements to procure US LNG from four distinct providers.
Tokyo Gas has expressed interest in the Alaska LNG project, according to Sugesawa.
This interest is rooted in the historical significance of Alaska as the source of the company’s inaugural LNG imports over five decades ago.
He cautioned, however, that the company would first need to evaluate specific factors, such as economic viability, before proceeding.
The company primarily procures LNG from Australia, supplemented by imports from Malaysia and Russia.
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