By Gerard Kreeft
Just at a time when there was a global over-supply of liquefied natural gas (LNG), the current Middle-East crisisunfolded and with it some surprising outcomes.
Most interesting and providential has been Japan: not its need for importing LNG but because of its buying and re-selling its imported LNG to other Asian countries. In essence this infra-trading is creating a new sub-market.
With much of the Middle-East in turmoil this emerging Japanese sub-market is potentially being expanded to include upstream investments in LNG projects in Africa, Canada and the USA thus ensuring future security and diversity of supply.
The over-supply of Japanese LNG will in the coming days will be a buffer for the effective loss of some 20% of global LNG: lost because of closure of the Strait of Hormuz and QatarEnergy’s declaration of force majeure of LNG shipments from Ras Laffan.
How this new sub-market was created
Sam Reynolds, Research Lead LNG/Gas Asia at the Institute for Energy Economics and Financial Analysis (IEEFA) recently posted an insightful analysis how Japan is coping with its over-abundance of LNG.
”40% of all LNG volumes handled by Japanese companies are sold elsewhere, up from just 16% in FY2018”, according to Reynolds.
“Japan’s resales of LNG to foreign markets continued to reach new highs in 2024, up nearly 15% compared to the previous year.”
“The country’s domestic consumption of LNG marginally increased but has fallen by nearly 20% since 2018, according to the latest LNG handling survey of 30 companies conducted by the Japan Organization for Metals and Energy Security (JOGMEC).”
Yet ”Japanese energy companies and trading houses are increasingly targeting overseas markets, aiming to capitalize on arbitrage opportunities and develop long-term relationships with customers abroad,” the IEEFA analyst explains.
..”Japanese companies and policymakers have persistently lobbied foreign governments to facilitate the development of upstream gas production and LNG export projects, citing energy security concerns”.
“In 2024, Japanese LNG resales were approximately 1.7 times Japan’s total direct imports from Australia, its largest LNG supplier. Resales amounted to around four times the volumes purchased from Malaysia, Japan’s second-largest LNG supplier.
Japan resold more LNG to other countries in 2024 than the total volume of LNG produced in Russia, the world’s fourth-largest LNG exporter.”
IEEFA anticipates that …”nuclear restarts and the uptake of renewables in Japan are expected to further reduce LNG demand in the coming years. … Japanese energy companies are likely to play an even more active role as LNG traders. The country’s 7th Strategic Energy Plan foresees demand falling to as low as 53Million tonnes by 2040 — a 20% reduction from current levels.”
Shell’s Outlook
In its 2025 LNG Outlook Shell presents a bullish LNG future: “The global trade in LNG is set to rise significantly by 2040, driven by Asian economic growth, the need to decarbonize heavy industry and transport and the emerging growth in the energy-intense tech sector.”
Shell’s bullish outlook is both in IEEFA’s and my analysis much too optimistic!
Shell’s 2025 LNG Outlook was published prior to the current Middle-East energy crisis. Yet the report is deadly silent about the LNG intra-trading taking place within Asia. Instead, we are presented a story of growth–albeit a slower growth in Asia:
“Global trade in LNG reached 407Million tonnes in 2024, an increase of just 3Million tonnes from 2023, the lowest annual supply addition for 10 years”.
Japan’s Rainmaker Role
Between 2013-2023 Japanese public institutions–Japan Bank for International Cooperation (JBIC), Japan Organization for Metals and Energy Security (JOGMEC), Nippon Export and Investment Insurance (NEXI), Japan International Cooperation Agency (JICA), and Development Bank of Japan (DBJ)– provided a $93Billion in support for overseas oil and gas projects between 2013 and 2023 fiscal years (April 2013 to March 2024), of which 45% of finance concentrated on upstream investments.
A key note: Mozambique was the top recipient country–$8.2Billion—for the financing of the Rovuma Area 1 LNG project.
Source: Solutions for Our Climate (SFOC), Oil Change International (OCI), and Japan Center for a Sustainable Environment and Society (JACSES)
Reynolds says that most of the new deals are with US producers because of the inherent flexibility of US contracts, allowing buyers to determine the final destination. In the past deals with Qatar were rather rigid but are now are starting to contain terms for destination flexibility and diversion rights.
Japan’s infra-trading will no doubt be expanded to include Africa, Canada and the USA.
The African Connection
Major LNG projects in Africa are undergoing rapid development in 2026, driven by over $50Billion in investments, primarily in Mozambique, Nigeria, Senegal, and Tanzania, aiming to turn the continent into a global energy supplier.
Given the need for continued diversity and security of supply, Asian and most likely Japanese buyers will undoubtedly lock in more LNG supplies in spite of the rising cost.
Key and Emerging LNG Projects:
- Mozambique:
- Mozambique LNG (Area1): Operated by TOTALEnergies this $20Billion project is restarting in 2026 after a force majeure suspension, with 13Million Tonnes Per Annum (MMTPA) capacity planned.
- Rovuma LNG: Led by ExxonMobil, a $30Billion project with a Final Investment Decision (FID) expected in 2026, aiming for 18 MMTPA.
- Coral Sul FLNG: Currently producing 3.4 mtpa, with the $7.2Billion Coral Norte FLNG project approved to double capacity by 2028.
- Tanzania:
- Likong’o-Mchinga LNG: A $42Billion project involving Shell and Equinor is moving toward a 2026 FID, targeting 10MMTPA capacity.
- West Africa (Nigeria, Senegal, Congo):
- Nigeria LNG(NLNG): Continues operation, with new, smaller projects like the 2.8 MMTPA FLNG project anticipated by 2028.
- Greater Tortue Ahmeyim(GTA)FLNG(Senegal/ Mauritania):
- Developing offshore gas to commercialize resources without large onshore plants and involving BP and Kosmos Energy.
- Congo LNG: ENI is developing the first natural gas liquefaction project in the Republic of Congo.
Key Canadian LNG Projects
- LNG Canada (Kitimat): The largest private-sector project in Canadian history, this joint venture (Shell, Petronas, PetroChina, Mitsubishi, KOGAS) has been exporting LNG since 2025. Phase 1 features two trains with an export capacity of 14MMTPA.
- Cedar LNG (Kitimat): A partnership with the Haisla Nation, this floating facility confirmed its Final Investment Decision (FID) in June 2024, with operations expected by late 2028.
- Ksi Lisims LNG (Pearse Island): A proposed 12 MMTPA floating project, this is a collaboration between the Nisg̱a’a Nation, Western LNG, and Rockies LNG, currently in the regulatory process.
- Woodfibre LNG (Squamish): Under construction, this project is located near Vancouver.
- Tilbury LNG (Delta): Operated by FortisBC, this facility is planning Phase 2 expansion to increase capacity.
Key USA Active and Developing LNG Projects
- Corpus Christi LNG (TX): Operating with expansion projects (Trains 8 & 9) reaching positive Final Investment Decision (FID) in June 2025.
- Rio Grande LNG (TX): Phase 2 development.
- Port Arthur LNG (TX): Phase 2 contracted 1.4 Bcf/d in 2025.
- Cameron LNG (LA): Major operating facility with further development.
- Plaquemines LNG (LA): Shipped first cargo in 2025.
- Golden Pass LNG (TX): First train expected to start in early 2026.
- Commonwealth LNG (LA): 9.5MMTPA terminal project.
- CP2 LNG (LA): Phase 1 expected in 2027.
- Alaska LNG: Project currently in development.
Some Final Comments
Wittingly or unwittingly Japan’s infra-trading is creating a new LNG sub-market: LNG marketeers always anxious to ensure they can ship their energy molecules are religiously avoiding any shipping in the Gulf region. Who can blame them! And who will benefit? Certainly, LNG projects in Africa, Canada and the USA will deliver their final LNG cargoes somewhere in Asia, staying far away from the Gulf region.
What Japan has historically been doing—investing in overseas projects—will be vastly increased to ensure its security and diversity of supply. Other countries will follow.
And the USA?
It has become the world’s largest exporter of LNG, having secured the top spot in 2022 and maintaining it through 2026 with record- setting exports surpassing 10Million metric tonnes in a single month for the first time in October 2025, primarily supplying Europe and Asia. Expect a continued upturn from Asian and African countries in USA LNG projects to ensure their diversity and security of supplies.
Gerard Kreeft, BA (Calvin University, Grand Rapids, USA) and MA (Carleton University, Ottawa, Canada), Energy Transition Adviser, was founder and owner of EnergyWise. He has managed and implemented energy conferences, seminars and university master classes in Alaska, Angola, Brazil, Canada, India, Libya, Kazakhstan, Russia and throughout Europe. Gerard has Dutch and Canadian citizenship and resides in the Netherlands. He writes on a regular basis for Africa Oil + Gas Report, and contributes to IEEFA(Institute for Energy Economics and Financial Analysis). His book the 10 commandments of the Energy Transition is now on sale at Bookstorehttps://books.friesenpress.com/store/title/119734000211674846/Gerard-Kreeft-The-10-Commandments-of-the-Energy-Transition
