Energy supply security: Japan

Overview

• Oil accounted for 46% of Japan’s total primary energy supply in 2012.
• In 2012, 4.8 million bpd of oil was imported.
• Approximately 83% of Japan’s crude oil imports came from the Middle East in 2012.
• Japan has 27 operational refineries with a total crude distillation capacity of approximately 4.5 million bpd.
• The 90 day stockholding obligation is met by holding government emergency stocks and placing a minimum stock obligation on industry.
• At the end of April 2013, Japan held 596 million bbls of oil stocks.
• Natural gas supply sources to the country are well diversified.
• Japan imports gas through 31 LNG terminals with approximately 10 billion m³ of storage capacity.

Oil

• Japan produced 17 000 bpd of crude oil in 2012, equivalent to 0.3% of consumption.
• Demand for oil products decreased from 2003 – 2012.
• Refining and distribution of oil products are fully privatised and open to foreign capital companies.
• At the end of March 2012, storage capacity in Japan was estimated at over 900 million bbls.
• The Petroleum Refining and Reserve Division of the Natural Resources and Fuel Department acts as a secretariat and forms the core of the Japanese National Emergency Strategy Organisation (NESO) during oil supply disruptions, in cooperation with other relevant parties.
• The government has implemented changes for improvements following the regional shortages of oil products caused by the 2011 earthquake.
• Japan has a bilateral agreement with New Zealand that allows it to hold stocks on New Zealand’s behalf.
• Public crude oil stocks are widely dispersed at 10 bases and 16 private terminals.
• In the case of failure to comply with compulsory stockholding obligations, companies can be sentenced to up to one year in prison or fines up to US$ 32 000.
• Demand restraint is considered as a secondary emergency response measure.
• Short term fuel switching from oil to other fuels is not regarded as an emergency response measure.

Gas

• In 2012, domestic production of natural gas was 3.3 billion m³.
• Natural gas production was equivalent to 3% of domestic demand.
• Japan’s demand for natural gas has steadily increased since 1980.
• In order to compensate for nuclear outages, natural gas use in power generation increased from 27% in 2010 to 41% in 2012.
• Australia was the biggest supplier of natural gas to Japan in 2012.
• Japan has 31 operating receiving LNG terminals with storage capacity of over 16 million m³.
• Storage capacity meets close to 30 days of domestic natural gas consumption.
• No legal obligations for industry to hold emergency stocks in the form of natural gas, LNG or alternative fuels are in place.

Adapted by Claira Lloyd