Oil and Gas Emergency Policy: Japan 2013 update

Oil remains the most significant energy source in Japan, accounting for some 45% of the country’s total primary energy supply in 2011. The transport sector represented around 38% of total consumption in 2010, while the industry sector accounted for 30%. A significant proportion of the industry sector’s oil demand comes from the chemical industry. The country has 27 operational refineries with a total crude distillation capacity of around 4.5 mb/d. Japan meets its 90-day stockholding obligation to the IEA by holding government emergency stocks and by placing a minimum stockholding obligation on industry. Japan has consistently met its minimum IEA stockholding obligation. Japan’s domestic natural gas production is limited – with production of around 3.3 bcm in 2012. Natural gas supply sources to the country are well diversified. As Japan has no cross border pipelines, the country imported natural gas through 31 liquefied natural gas (LNG) terminals with around 10 bcm of natural gas storage capacity. Key elements of Japan’s overall gas security policy are diversifying its long-term supply contract portfolio, ensuring flexibility of increasing imports in times of an emergency in long term contracts, and using voluntary commercial LNG stocks in industry.