# Japan Aims to Enhance Regional LNG Competition as Domestic Demand Slows Down

- Link: https://www.thailand-business-news.com/japan/210696-japan-aims-to-enhance-regional-lng-competition-as-domestic-demand-slows-down
- Published: 2025-04-22T09:32:00+07:00
- Author: News Desk

**Japan’s LNG imports are projected to decline 2.5% annually through 2034 due to
a shift towards renewables and nuclear power, while aiming to enhance its energy
market influence in Southeast Asia.**

**Key View**

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 * Japan is expected to see a long-term decline in LNG imports, decreasing by an
   average of 2.5% annually over our forecast period, due to its strategic shift
   towards renewables and nuclear power in line with its decarbonization goals.
 * Japan is bolstering its influence across the Southeast Asian energy market with
   strategic investments in LNG-power projects and facilitating Memorandums of Understanding(
   MoUs) for the resale of surplus LNG. This will enhance the market’s influence
   over Asia’s significant projected LNG demand growth.
 * Moderately higher energy prices in 2025 may hamper Japan’s ambitions to stimulate
   demand in Southeast Asia, as high prices could weigh on regional consumption.

**We maintain a bearish long-term outlook on LNG imports into Japan, driven by decarbonisation
efforts in the power sector aimed at increasing the share of renewables and nuclear
power. **We anticipate that Japan’s LNG imports will decrease at an average annual
rate of 2.5% from 2024 to 2034, with total consumption expected to fall to 73.0bcm
by 2034. Currently, Japan is the world’s second-largest LNG importer, following 
Mainland China, primarily due to its lack of pipeline gas capacity and limited domestic
gas consumption. This reliance on LNG is crucial for maintaining energy security.
However, Japan’s energy policy is undergoing a significant transformation, focusing
on decarbonisation and reducing fossil fuel dependence to achieve emissions reductions.
This trend aligns with Japan’s Strategic Energy Plan, which aims to reduce gas dependency
by 20.0% by 2030. The plan emphasises increasing the share of renewable energy and
reconsidering nuclear power as essential components of its low-carbon initiatives.
The government is actively pursuing these goals by setting ambitious targets to 
transition its energy mix, with nuclear power expected to contribute 20.0% of electricity
needs by 2040.

As Japan faces a shift in its energy landscape, the government is looking to boost
regional competition in the liquefied natural gas (LNG) market. With domestic demand
slowing due to a combination of economic factors and an increasing shift towards
renewable energy sources, Japan recognizes the need to adapt its approach to securing
LNG supplies. This strategy aims to enhance cooperation with neighboring countries
and diversify import sources, ensuring energy security despite a challenging domestic
market.

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The Japanese government has been actively engaging with other LNG-exporting nations,
promoting collaborative projects and seeking investment opportunities. By fostering
regional partnerships, Japan is not only aiming to increase competition among suppliers
but also to drive down prices for consumers. This alignment with neighboring countries
such as Australia and the United States is critical for Japan to maintain its energy
stability while managing the ongoing transition toward greener alternatives.

Moreover, by boosting regional LNG competition, Japan can mitigate risks associated
with overdependence on a limited number of suppliers. As it seeks to enhance its
energy portfolio, the country is also exploring innovations in technology and infrastructure
to optimize the LNG value chain. These efforts underline Japan’s commitment to a
balanced energy strategy, blending traditional fossil fuels with renewable energy
sources while safeguarding its economic interests in a post-pandemic world.
[Read More](https://www.fitchsolutions.com/bmi/oil-gas/japan-seeks-boost-regional-lng-competition-amid-decelerating-domestic-demand-09-04-2025)