Japan utilities LNG stockpiles slump as hot summer lifts air-conditioner demand
TOKYO, Aug 23 (Reuters) - Liquefied natural gas (LNG) stockpiles held by Japanese electric utilities hit more than one-year lows, as the hot summer drives usage of air-conditioners and typhoons delay cargoes, data released by Japan's industry ministry showed on Wednesday.
Japan and China are the biggest LNG importers globally but Japan has been recently cutting imports as restart of nuclear reactors and increase in renewable energy reduce the need for fossil fuels.
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LNG inventories held by Japanese electric utilities, a key and the most recent indicator of the stockpile level, were down to 1.81 million metric tons as of Aug. 20, data released by the Ministry of Economy, Trade and Industry (METI) showed.
This is the lowest level since April 2022, down from 1.94 million tons held a week before and versus 2.75 million tones held as of end of August last year, according to the data. The latest level is also below 2 million tones of the 5-year average for August.
Electric utilities in general hold about a half of the country's LNG inventories, according to the state-owned Japan Oil, Gas and Metals National Corporation (JOGMEC) which monitors the country's LNG flows and prices.
A fall in inventories is seen to reflect higher power demand for air-conditioning amid hot summer and as the recent typhoons delayed some cargo deliveries, Shinnosuke Kojima, a METI official dealing with the electricity utilities data, said.
METI believes the fall is temporary and does not pose a threat of LNG shortage, he told Reuters.
LNG inventories held by Japanese city gas suppliers stood at 2.71 million tons as of end-May, up from end-April's 2.58 million tonnes, according to the latest available data from METI.
The current summer is one of the hottest globally including in Japan, where temperatures in Tokyo have been close or above 35 degrees Celsius (95 degrees Fahrenheit). (Reporting by Yuka Obayashi and Katya Golubkova; Editing by Rashmi Aich)