TOKYO: Japan is set to boost imports of U.S. liquefied petroleum gas (LPG) to more than 1.8 million tonnes in 2016 to cut its reliance on Middle Eastern origins that make up most shipments now, the head of a Japanese LPG importers group said.
By 2018, LPG imports from the United States could reach some 3 million tonnes, or about 20 percent of total imports, Japan LP Gas Association Chairman Tatsuhiko Yamasaki told reporters on Wednesday.
LPG imports from the United States totalled 462,000 tonnes in the fiscal year that ended in March.
U.S. prices, linked to Mont Belvieu prices in Texas, are cheaper than those of Middle East LPG, which are linked to Saudi Arabia's benchmark contract.
In the United States, development of shale resources has resulted in a sharp increase in production, turning it from a large energy importer into an oil and gas exporter.
Analysts say the U.S. LPG export boom will be further aided by an expansion of the Panama Canal.
Allowing the passage of so-called very large gas carriers (VLGC) from 2015 and reducing costs by cutting the sailing time from the United States to Asia by more than two weeks.
The expected rise in U.S. imports would reduce reliance on Middle East origins from about 84 percent in the year to March, with the reduction probably hitting Saudi Arabia in particular, said Yamasaki, who is also president of Astomos Energy Corp.
That could put pressure on non-U.S. producers to come up with more competitive pricing, he added. (Reuters)
