‘Japan to continue buying LNG from Brunei’

National 2 minutes, 8 seconds

BANDAR SERI BEGAWAN

JAPAN will continue to buy liquefied natural gas from the sultanate, although it may purchase LNG from new suppliers in addition to the existing ones in the Middle East and Asia, the Japanese ambassador said.

Noriko Iki told the Oil and Gas Year Brunei 2015 report that the extension of the long-term supply contract between Brunei LNG and a consortium formed by Tokyo Electric Power Company (Tepco), Tokyo Gas and Osaka Gas in March 2012 was proof of the commitment.

In March 2012, the Minister of Energy and Industry at the Prime Minister’s Office said Brunei signed a Heads of Agreement to renew a contract with the Japanese consortium for the supply of 3.4 million metric tonnes of LNG per year for the next 10 years beginning in April 2013.

Under the HOA, Brunei will supply the LNG to Tepco, Tokyo Gas and Osaka Gas.

Japan is one of the world’s biggest LNG consumers and first started importing LNG from Brunei in 1972.

The ambassador said that since then, about 90 per cent of Brunei’s LNG exports have gone to Japan every year.

Apart from being trade partners in LNG, Iki said the relationship between Brunei and Japan is diversifying.

She cited the Brunei Methanol Company, which started producing and exporting methanol to Japan in 2010, signifying a departure from exporting LNG.

Another indicator of cooperation, she said, was the contract signed in November 2014 between Japan’s Nippon Steel & Sumitomo Metal Corporation, Sumitomo Corporation and Brunei Shell Petroleum for the construction of a pipe threading plant in Brunei.

The contract allows for Japanese pipe threading technology to be transferred to the sultanate and the creation of local jobs.

“It is very important that our relationship will continue to contribute to industry diversification in areas such as petrochemicals, metal processing, energy efficiency and conservation as well as technology transfers,” she said in the report.

Iki said Brunei is attractive for Japanese investment because it has relatively low utility costs, including electricity and water, as well as a central location in Southeast Asia offering accessibility to other member countries of the Association of Southeast Asian Nations (ASEAN).

“Additionally, higher prospective trade activity among members of ASEAN as well as the programmes offered by Brunei’s government such as Pioneer Status - an incentive that can exempt up to eight years of corporate taxes - play a vital role in encouraging future investment in the country.”

The ambassador said she hoped collaboration between Japan and Brunei in new areas will strengthen and that their energy relationship will remain stable.

The Brunei Times