The giant Japanese gas tanker LNG Sakura is doing
its share to appease President Donald Trump’s frustration over trade with Asia.
The vessel with the largest spherical tanks in the
liquefied natural gas industry is taking the first shipment from Dominion
Energy Inc.’s Cove Point terminal in Maryland to the Asian nation. With a name
that means cherry blossom, the ship can serve “as a symbol of friendship and
goodwill between Japan and the United States,” according to co-owner Nippon
The shipment is the “the first of many” as “US LNG
will power millions of Japanese homes and businesses,” according to a post on
Twitter from the U.S. embassy in Tokyo.
It’s an easy win for both countries.
For the Trump administration, which has been pushing
for Asian purchases of America’s abundant shale gas supplies to reduce a trade
imbalance, it suggests the pressure may be working. Japan, the largest buyer of
LNG in the world, needs the fuel to meet power demand at its highest level
since the 2011 Fukushima nuclear disaster. Most importantly, keeping good
relations with the U.S., the largest buyer of its exports after China, is vital
for Japan’s economy.
“There’s definitely been concern in the Japanese
government about the Trump administration’s focus on trade deficits, so this
may be a effort to demonstrate that Japan is working that issue,” said Jason
Feer, global head of business intelligence at Poten & Partners. “It’s
interesting the first Japanese-owned cargo from that facility is actually going
to” that country.
Just a few weeks after the second U.S. gas export
terminal started commercial service, LNG Sakura left the facility on April 22
and is headed for Japan, Hiromi Sato, a spokeswoman at the U.S. embassy in
Tokyo, said in an email late on Tuesday.
Cove Point LNG Facility Now Second in U.S. to Export
Although Asian nations are signing multiple
long-term contracts with U.S. LNG exporters, there is uncertainty over how much
they would actually import themselves rather than sell to the global market’s
highest bidder. The latter case wouldn’t help reduce deficits with the U.S., so
confirmation that LNG Sakura’s load is a Japanese import comes as a good sign
of cooperation to avoid a pending trade war.
During Japanese Prime Minister Shinzo Abe’s visit to
the White House this month, he and Trump announced a new trade dialogue.
Shale gas sent from U.S. fields is expected to rival
Australia and Qatar for worldwide dominance in the next five years as three
more export terminals may open on the Gulf Coast by 2019.
First Commercial LNG Cargo from U.S. East Coast Sets
Japan is already the fifth largest importer of U.S.
LNG, having bought 20 cargoes as of April 18 from Cheniere’s Sabine Pass since
it started liquefying the fuel in 2016. Dominion’s Cove Point has agreements to
sell gas to a joint venture of Sumitomo Corp. and Tokyo Gas Co., but those cargoes
could be resold in transit.
Kansai Electric Power Co. is the beneficial owner of Sakura, with 70
percent. NYK owns the remaining stake in the vessel.