Japan May Boost U.S. LPG Imports to 20 Percent of Total in 2018

Japan may rely on the U.S. for 20 percent of its liquefied petroleum gas imports in 2018, up from 3.5 percent last year, according to an industry group.

Japan plans to buy about 3 million metric tons of the fuel from the U.S. in 2018, Tatsuhiko Yamasaki, the chairman of the Japan LP Gas Association, told reporters in Tokyo today. The country depended on the Middle East for 85 percent of its 13.2 million tons of purchases last year, according to a report from the group that represents 14 members.

Japanese companies including Astomos Energy Corp. are boosting LPG imports from the U.S. to take advantage of a surge in North American shale-gas production. Overseas shipments meet about 70 percent of Japan’s requirement, with the remainder covered by domestic oil refining. LPG supply from the U.S. more than doubled in the first half of this year to 390,000 tons, data from the Finance Ministry in Tokyo show.

Japan can improve its bargaining power and reduce fuel costs by diversifying its sources of LPG supply, according to Yamasaki, who’s the president of Astomos Energy, a joint venture between Idemitsu Kosan Co. and Mitsubishi Corp. The country may increase imports from Australia, Canada and eastern Africa in the coming years, he said, declining to provide estimates.

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