JERA CEO Warns LNG Prices Have Further to Climb

JERA, Japan's biggest importer of liquefied natural gas and the country's largest power producer, said it expects LNG prices to rise further as supplies from Qatar remain disrupted. CEO Yukio Kani told Bloomberg TV that JERA does not foresee Qatari LNG returning to the market soon after QatarEnergy extended a force majeure on deliveries to Asia and Europe through the end of November.

The ongoing disruption follows a protracted U.S.-Iran stalemate affecting traffic through the Strait of Hormuz, a key route for Qatari exports. The shortage of Qatari cargoes has already pushed Asian spot LNG and European benchmark gas prices to their highest levels since the 2022-2023 energy crisis, and market participants see little immediate relief ahead of the northern hemisphere winter.

Kani pointed to additional structural pressures on prices, including unusually low gas inventories in Europe and the European Union's scheduled ban on Russian LNG imports starting in January 2027. As of October 1, Gas Infrastructure Europe data showed EU storage sites were 71% full, versus a five-year average of about 86% for that date. Some large economies are faring worse: Germany's storage was around 58% full at the start of October.

The shortfall of Qatari supply is forcing buyers in Asia to compete for alternatives, prompting some to increase coal use and accelerate renewable targets to reduce exposure to volatile gas markets. Market participants and policy makers in Europe are also facing pressure to secure supplies ahead of winter to avoid potential shortages and further price spikes, given the current storage deficits.