Indonesia recently announced it would cut its 2005 LNG exports to Japan, South Korea and Taiwan below contracted levels due to falling production. Indonesian LNG accounts for 30% of Japan’s gas needs.
“Japan is extremely nervous about securing a stable energy supply because of higher crude oil prices," Nakagawa said.
With LNG contracts intended to ensure long-term stable supplies, it is very unusual for an LNG producer to unilaterally change shipment volumes. Indonesia's change of plans has forced several Japanese firms to seek alternative supply sources.