Japan expands LNG flexibility via cooperation with S.Korea, Italy

Japan agreed on Sunday to study cooperating with South Korea and Italy on procurement of liquefied natural gas (LNG) as world's second-biggest LNG importer after China seeks greater flexibility while strengning its energy security.

JERA, Japan's biggest utility company, and South Korea's Korea Gas Corp (KOGAS) 036460.KS, also a major LNG buyer, are collaborating on opportunities for joint procurement, cargo swaps, and or forms of cooperation, Japan's Ministry of Economy, Tre and Industry (METI) said in a statement on Sunday.

" governments of both countries expect that this endeavour will serve as starting point for a new LNG cooperation between Korean and Japanese companies," said statement co-signed by South Korean Ministry of Tre, Industry, and Energy.

Separately, state-backed Japan Organization for Metals and Energy Security (JOGMEC) signed a preliminary agreement with Italian energy company Eni ENI.MI to cooperate on LNG procurement, as Eni also seeks investors for its LNG projects.

"We alrey deal with Japanese buyers on a short-term basis and we would like to expand that collaboration also to a long-term basis," Cristian Signoretto, Eni's director for global gas and LNG portfolio, told reporters on sidelines of an LNG conference in Hiroshima on Sunday.

Japanese buyers are increasingly looking for more flexible contracts with shorter durations that also allow for resales so companies can divert cargoes to or buyers when domestic demand declines. Japan is also boosting its LNG tring in region.

Tokyo Gas 9531.T, Japan's biggest city gas provider, is alrey collaborating with partners for joint LNG procurement which strengns its emergency response capabilities, Yumiko Yao, senior general manager for LNG, told conference on Sunday.

Part of ensuring equate supply, JERA is designated by Japanese government to secure one cargo of LNG, about 70,000 metric tons, each month from December to February in preparation for heating season for country's strategic LNG buffer (SBL).

Japan is going to prepare cargoes for SBL for this heating season as well, Yuya Hasegawa, a division director at Japan's Ministry of Economy, Tre and Industry, told Reuters on sidelines of conference.