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Bloomberg
Russia’s Novatek PJSC is looking at storing liquefied natural gas produced in the Arctic on Japan’s southern island of Kyushu so it can better meet spot demand from China and cut shipping costs.
Saibu Gas Co, which last month signed a preliminary deal to allow Russia’s biggest LNG producer to use its storage facilities, said it may build two additional LNG tanks and upgrade its re-exporting capability. That infrastructure would of- fer Novatek greater flexibility to meet Chinese and South Korean demand and cut freight costs, according to Wood Mackenzie Ltd.
“Given its LNG sources are very far from Asia, storage and re-loading will enable it to capture shorter-term arbitrage opportunities,†said Nicholas Browne, an analyst with the energy consultant in Singapore. “Keeping gas in storage could ultimately reduce its costs in supplying Asian markets†because shipping is more expensive from the Arctic when ice cover increases.