Tohoku Electric Plans For Eventual Halt to Russian LNG Contract
(Reuters) - Japan's Tohoku Electric Power needs to consider its procurement strategy for liquefied natural gas (LNG), assuming it will eventually halt purchases from Russia, President Kojiro Higuchi said on Friday.
The utility imports 420,000 metric tons of LNG annually from Russia's Sakhalin-2 project under a 20-year contract through fiscal 2029.
Higuchi said that accounted for about 10% of the company's LNG.
"We must think (about future procurement plans) on the premise that we will eventually stop buying from Russia," he told a news conference.
The company later said that no decision has been made regarding the renewal of the contract, noting that it will reexamine the situation at the time of expiration before deciding whether to continue the purchase.
Resource-scarce Japan is shoring up long-term supplies of LNG from close allies Australia and the United States as key contracts from providers including Russia are set to expire by the early 2030s.
Last week, U.S. President Donald Trump said that Japan will soon begin importing a record amount of new shipments of American LNG, after his talks with Japanese Prime Minister Shigeru Ishiba.
Tohoku Electric already buys LNG from the U.S. and it will consider whether to increase purchases based on a comprehensive assessment of competitive pricing, procurement stability and diversification, Higuchi said.
"In the midst of instability in the Middle East and global uncertainty, diversifying energy procurement sources is crucial for risk management," he added.
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