Japan’s trade ministry is set to invite South Korea to discuss joint purchases of liquefied natural gas as the world’s two biggest buyers seek to cut fuel import costs, according to two government officials with knowledge of the plans.
The ministry wants to meet for talks before September, according to the Japanese officials who asked not to be identified because the information isn’t public. Shinichi Kihara, the director of the ministry’s international affairs division, will announce the plan in a speech in Houston today, the people said. A trade ministry spokesman in Tokyo and Sim Sung Tae, an official at South Korea’s Ministry of Knowledge Economy in Gwacheon declined to comment.
Japanese Prime Minister Shinzo Abe is under pressure to narrow last year’s record trade deficit of 6.9 trillion yen ($74 billion) that was spurred by imports of LNG after nuclear power plants were shut nationwide following the March 2011 earthquake. The country paid 6 trillion yen for a record 87.3 million metric tons of the fuel in 2012, customs data show.
This would be the third round of LNG purchase talks between Japan and South Korea that began in November 2011, according to a document on the trade ministry’s website. The second meeting between the countries that account for 50 percent of global LNG imports was held in May 2012.
Kihara will announce plans to diversify LNG import sources and tap new areas of supply such as North America and Mozambique at the IHS CERAWeek conference in Houston attended by executives from producers including Exxon Mobil Corp. (XOM), BP Plc (BP/) and Saudi Arabian Oil Co., according to a draft copy of his presentation obtained by Bloomberg News.
Kihara will also mention plans to hold the second international LNG conference in Tokyo in the autumn of this year, according to the draft of the presentation. He will also refer to the Abe administration’s intention to restart nuclear reactors as soon as safety is reassured.
ConocoPhillips (COP) Chief Executive Officer Ryan Lance, General Motors CEO Daniel Akerson and Saudi Aramco President Khalid al- Falih are among participants at the Houston conference, according to the event website.