How Japan became an LNG juggernaut

Diversification, flexibility, and a turn toward Asia

In this post and over the next few weeks, I'll be writing about how Japan became the largest LNG importer, how it maintained that position for so many years, what the foreign policy implications of relying on LNG imports are, and how LNG figures in Japan's climate change discourse.

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Shimizu LNG Unloading Arm and Mt Fuji (Wikimedia Commons)

I've so far disproportionately focused on the more nascent energy technologies that Japan is developing: perovskite, offshore wind, ammonia, hydrogen, etc.

But the energy source that's truly the bedrock of Japan's energy mix and energy security is gas.

Fossil gas (often known by its street name "natural gas") plays a critical role in Japan’s energy supply, accounting for the third-largest energy source in total primary energy supply (after oil and coal) in 2022. Lacking domestic production and with no cross-border pipelines, Japan has to import gas from abroad in liquid form --- liquefied natural gas, or LNG.

Japan has been the biggest LNG importer in the world since the 1980s, holding that top position until early 2023, when China surpassed Japan’s LNG import volume.

Ensuring a steady supply of LNG has been a core pillar of Japan’s energy security since the 1970s. And its LNG strategy had --- and still has --- profound implications far beyond Japan.

So, how did Japan become a behemoth LNG importer and a juggernaut in the global LNG landscape? To put it very simply, this process unfolded through 4 developments:

• diversifying the sources of LNG imports

• making large investments in upstream LNG projects internationally

• creating a more flexible LNG market in Asia

• re-selling LNG to South and Southeast Asia even as Japan's domestic gas demand steadily declines

From the late 1970s until well into the 21st century, Japan's skillful import strategies that made it an LNG juggernaut were driven by an overwhelming anxiety about energy security. But as we'll see, Japan's more recent efforts to supply LNG to Asia stem from commercial motives rather than energy security.