Japan, South Korea Eye Joint LNG purchases

Japan and South Korea have agreed to jointly purchase liquefied natural gas, in the hope of lowering import prices and discussion regarding procurement measures is expected to start in Tokyo on Nov. 28.

Demand for LNG for thermal power generation has risen recently in Japan due to the on-going nuclear crisis.

Global trade in LNG reached about 11 trillion cubic feet in 2010, and Japan and South Korea account for nearly 50 percent of that figure.

Japan is the largest importer at about 3 trillion cubic feet, followed by South Korea at about 2 trillion cubic feet.

In Japan, since the nuclear crisis began, utilities have been switching from nuclear energy to thermal and other types of power generation. In South Korea, depreciating won has pushed the import cost higher.

Under these circumstances, both Japan and South Korea have been seeking to cut import prices of LNG to prevent utility firms from passing the costs on customers.