Japan’s liquefied natural gas (LNG) resales surged to record levels in fiscal year 2024 as domestic demand continued to fall, underscoring the country’s transformation from one of the world’s largest LNG consumers into an increasingly dominant trader in international gas markets.
According to the latest survey by the Japan Organisation for Metals and Energy Security (JOGMEC), 40 per cent of all LNG volumes handled by Japanese companies were sold overseas, up sharply from 16 per cent in fiscal 2018.
The data shows that Japan resold more LNG last year than the total output of Russia, the world’s fourth-largest LNG exporter.
These sales were roughly 1.7 times Japan’s direct imports from Australia, its largest supplier, and about four times its purchases from Malaysia.
The findings reflect a major shift in Japan’s energy landscape.
Domestic LNG consumption has fallen nearly 20 per cent since 2018, even as resales to other countries rose nearly 15 per cent in the past year alone.
With nuclear power restarts and rapid growth in renewables reducing gas demand, Japanese utilities and trading houses are increasingly turning to foreign markets to manage surplus supply and capture trading profits.
Sam Reynolds, Research Lead for LNG and Gas at the Institute for Energy Economics and Financial Analysis (IEEFA), noted that corporate strategies and public policy have encouraged this shift.
He warned that these moves could expose Japanese firms to significant financial risks amid an emerging global LNG oversupply.
IEEFA’s earlier reporting found that Japan’s major LNG buyers have consistently over-contracted, purchasing more gas on long-term deals than needed domestically.
The excess has been diverted to markets in South and Southeast Asia, where Japanese companies are developing new infrastructure and customer networks.
A subsequent IEEFA study estimated that in 2024, Japanese resales of Australian LNG were worth between AU$11 billion and AU$D 14 billion, generating over AU$1 billion in profit.
Despite declining domestic demand, Japan’s Ministry of Economy, Trade and Industry (METI) continues to urge companies to secure LNG supplies of about 100 million tonnes annually as part of its wider energy security strategy.
The government’s Seventh Strategic Energy Plan projects LNG demand could drop to as low as 53 million tonnes by 2040, yet energy firms have signed more than 10.5 million tonnes per annum of new LNG purchase agreements, many extending past Japan’s 2050 net-zero target.
Japanese companies have also invested heavily in overseas fossil fuel projects, including US$10.8 billion in US-based oil and gas ventures over the past two years.
Under a new trade agreement announced in February 2026, Japan is expected to invest US$33 billion in gas-fired power projects in Ohio.
Analysts suggest these deals may provide firms with access to feedgas and a hedge against volatile prices, but they also deepen Japan’s exposure to fluctuations in foreign energy markets.
As global LNG supply expands and prices soften, Japanese energy companies are evolving from major end users to active traders.
However, with thinner trading margins and rising US gas costs, many could face growing profit pressures as they compete in an increasingly crowded global market.
