Tokyo (Platts)--12Feb2013/510 am EST/1010 GMT

Japan's Minister of Economy, Trade and Industry Toshimitsu Motegi will ask Qatar Tuesday to remain a reliable LNG supplier and supply the gas at lower prices as part of ongoing efforts to lower Japan's increased import costs, ministry officials said.

The request will be made during a meeting with visiting Deputy Prime Minister Abdullah Attiyah Tuesday evening at the ministry, the officials said.

Japan's latest meeting with Qatar comes after the two countries issued a joint statement after high level talks in Tokyo in October 2012 when the Qatari side pledged to expand its supply of oil and gas to Japan "at mutually acceptable terms and conditions in a stable and reliable manner."

Japan's LNG demand has soared following the March 2011 Fukushima nuclear disaster and subsequent nuclear outages in the country prompted local utilities to seek additional supplies from major exporters such as Qatar. But Qatar has insisted on retaining oil-linked contracts for its LNG.

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Japan also has been stepping up efforts to lower the cost of LNG imports after reporting its second consecutive annual trade deficit in 2012.

LNG imports from the Middle East, which are linked to crude oil prices, are far more expensive than natural gas prices in the US, where Henry Hub prices last year fell to 10-year lows and are currently well below LNG prices.

Japan imported a record 87.3 million mt of LNG in 2012 when Qatar was its second-largest supplier, with Japan importing a total of 15.7 million mt in the year from the country, which has 77 million mt/year of total production capacity.

Japan's LNG imports from Qatar jumped 32% from a year ago in 2012, while its average import price jumped 11.6% year on year to $902.08/mt ($17.35/MMBtu), according to data compiled by the Ministry of Finance.

This compares with Australia, Japan's largest LNG supplier in 2012, when Japan imported 15.9 million mt in the year, up 13.9% from a year ago and its average import costs rose 7.8% year on year to $825.22/mt ($15.87/MMBtu), MOF data showed.

Rising oil prices in recent years have pushed up the price of oil-indexed gas above spot market prices, prompting consumers to seek renegotiation of long-term contracts that were signed when oil prices were lower.

--Takeo Kumagai, takeo_kumagai@platts.com
--Edited by Haripriya Banerjee, haripriya_banerjee@platts.com

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