Jobama's Iranian Whopper

[Tree]

Yeah Right Jobama! Pump Central has sent updates and our INTEL states that no one -EWC/IOC/Flex/Petromin/KGB LNG/COP/LNGL/PacLNG/Shell/O'Neill/Duma or Somare - can keep you out of their offices! 70 days LNG reserve doesn't last as long as a multi-year war in the Gulf me no thinkie.

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Japan won't be affected if Iran closes Strait of Hormuz: Gemba



TOKYO (Kyodo) -- Japan will not be seriously affected even if Iran closes the Strait of Hormuz, as it has enough oil and liquefied natural gas in reserve, Foreign Minister Koichiro Gemba said Friday.

Gemba also told reporters that he does not expect the flow of oil through the strait to be disrupted for a long period of time even if it is closed, adding that the Japanese government is prepared to bring energy sources from abroad in many different ways.

About 80 percent of Japan's imported oil is passing through the Strait of Hormuz, amid the standoff between the West and Iran over Tehran's nuclear program.

Gemba said that Japan has stockpiled oil reserves equivalent to about 200 days' worth of consumption and about 70 days' for LNG.

"Economically it is not wise also for Iran" to close the strait, given that the Middle Eastern country is highly dependent on revenues from its oil exports, Gemba said. "In order to punish others, it will be very much like shooting oneself in the head."

To prevent Iran from taking provocative steps, Gemba said that "effective sanctions" against the country are needed and Japan still believes it is vital to solve the nuclear issue "diplomatically and peacefully."

"To carry out effective sanctions (against Iran), Japan is actively taking part and I expect that a certain degree of effect will appear bit by bit," he said.

Japan, poor in natural resources, imports nearly 10 percent of its oil from Iran.

It is in the final stage of negotiations with the United States on Washington-led sanctions against Iran, and considering cutting its crude oil imports from the Middle Eastern country by at least 11 percent.

(Mainichi Japan) February 24, 2012

[Palm]

It's at least a Jr Whopper. Japan has to say these things to try and keep a lid on prices while they get other sources in place. Fact is no one knows the extent that Iran will go with the Strait of Hormuz. They have started "penalizing" a few countries that buy little of their oil telling them, "No more "soup" for you!". But that's also a lot of posturing. An article out today tells some interesting things regarding JObama's thirst and where they are looking. It again mentions the Russian/Gazprom sourcing, but then mentions something interesting which gives the Kogas/Japex/Mitsui more legs:
"Choo Kang-soo, CEO of South Korea's state-run Korea Gas Corp. (KOGAS), visited Japan in early February and met top officials at Japanese electric and gas utilities. He is believed to have discussed joint procurement of LNG at the meeting.

South Korea is also lacking in energy resources and is the world's second-largest LNG importer, after Japan. Japan and South Korea together account for nearly half the world's LNG imports. Joint procurement would benefit both countries. Gas demand peaks in summer in Japan, but in winter in South Korea. Joint stakes in overseas gas fields purchased by KOGAS and Japanese firms is another topic being discussed behind the scenes."

This meeting happened in early February, and the articles regarding the joint bid came out on Feb 7th; so we now understand where that all came from. Here's the full article:
"Japan Looks for New Gas Supplies

The Japanese government and industry are under growing pressure to find new suppliers of liquefied natural gas (LNG), to procure the fuel jointly with other countries and to buy stakes in overseas gas fields to ensure stable supplies at lower prices.

Higher price

As Japan grows more dependent on LNG for power generation in the aftermath of the nuclear crisis, the biggest challenge is to lay its hands on cheaper fuel. Japanese companies now pay about 16 dollars per million British thermal units from overseas suppliers under long-term contracts, six to seven times higher than the price of natural gas in the U.S. and at least 50% higher than in Europe.

The biggest reason for Japan's exorbitant prices is that its long-term LNG purchase contracts are tied to the price of crude oil, which has been pushed into the stratosphere by speculation.

Russian connection

Last summer, Russia's state-owned gas monopoly, Gazprom, working through a major Japanese trading house, sounded out the Japanese government about entering the domestic electricity market.

The move reflects Gazprom's effort to find buyers for its gas, such as thermal power plants in Japan, anticipating the electricity market will be liberalized in the future.

Russia is looking for new Asian customers to reduce its dependence on the European market. As gas price negotiations with China have bogged down, Russia is putting out feelers to Japan.

Ichiro Takahara, head of Japan's Agency for Natural Resources and Energy, met with Alexey Miller, chairman of the Gazprom's Management Committee, in Moscow on Feb. 20. The two confirmed a plan to jointly construct an LNG plant at the Russian port of Vladivostok, which faces the Sea of Japan. Under the plan, natural gas produced in Sakhalin and Siberia will be liquefied at the Vladivostok plant and shipped to Japanese customers.

Korea and Japan

Choo Kang-soo, CEO of South Korea's state-run Korea Gas Corp. (KOGAS), visited Japan in early February and met top officials at Japanese electric and gas utilities. He is believed to have discussed joint procurement of LNG at the meeting.

South Korea is also lacking in energy resources and is the world's second-largest LNG importer, after Japan. Japan and South Korea together account for nearly half the world's LNG imports. Joint procurement would benefit both countries. Gas demand peaks in summer in Japan, but in winter in South Korea. Joint stakes in overseas gas fields purchased by KOGAS and Japanese firms is another topic being discussed behind the scenes.

All hail shale

While Japan and South Korea may act as partners in LNG procurement, the two countries are rivals in some parts of the world. On Jan. 30, KOGAS clinched a deal with U.S.-based Cheniere Energy, Inc. to import 3.5 million tons a year of shale gas over 20 years, starting in 2017.

Technological breakthroughs have made the unconventional gas much easier to extract and commercially viable, sparking a so-called shale revolution. Full-scale commercial production of shale gas began in North America in the early 2000s.

In the U.S., increased shale gas production has pushed down natural gas prices, which are now between 2 and 3 dollars per million BTUs, less than a sixth of the current price in Japan. Even including transportation costs, U.S. gas would be at least 30% less than Japan currently pays for LNG.

The U.S. is planning to export surplus shale gas but has imposed restrictions on exports for energy security reasons.

Natural gas exports must be approved by the Department of Energy on a project-by-project basis. It is more difficult for countries that have not concluded free trade agreements (FTAs) with the U.S. to get approval for natural gas imports than for its FTA partners.

At a meeting in San Francisco last September, Seishu Makino, senior vice minister at Japan's Trade Ministry, asked Department of Energy Secretary Steven Chu to approve the export of natural gas to Japan, but KOGAS became the first non-FTA country to get such approval.

Japanese power companies have up to now been guaranteed profits despite high LNG prices, thanks to a tariff-setting formula that automatically adds a profit margin to fuel procurement and other costs.

That has given the utilities an incentive to emphasize stable supplies rather than price, and to favor doing business with U.S. and European oil majors.

"It is just like having always shopped at department stores. In the future, they should also use discount shops" such as shale gas, said Akira Ishii, a special adviser to the government-affiliated Japan Oil, Gas and Metals National Corp.

Source: Nikkie News"
http://www.naturalgasasia.com/japan-look...plies-4726

[jft310]

IOC's price to produce NG including condensates is under $1 per mcf.IOC shareholders would retire on yachts with a price 30% below $16 per mcf.Can blow the US out of the water in a price war.How many know that the actual cost to produce Shale NG is $6 plus per mcf.How long will these low prices exist with those type inherent costs.