Ukraine war: Japan firm bans Russian gas, first to refuse shipment despite desperate need

A Japanese regional utility released a tender to purchase a shipment of liquefied natural gas with a clause requesting that the cargo not come from Russia, in what may be the first LNG tender to specifically ban the pariah state.

Tohoku Electric Power Co is seeking a spot LNG cargo for April to May delivery with loading ports excluding Russia, according to traders with knowledge of the matter. The utility is in need of more LNG as an earthquake last week knocked offline a coal-fired power plant, boosting its dependence on gas generation.

While most Asian LNG importers have paused buying spot cargoes from Russia since the war in Ukraine began, traders until now haven’t seen a purchase tender that has been so specific in avoiding the country. The move is likely to be repeated by buyers across the region, tightening available natural gas supplies just as the market is grappling with a shortage and sky-high prices.

Tohoku’s actions in the LNG market follow a similar pattern in Japan’s oil sector, where the nation’s top refiners have said they will stop importing Russian crude. It’s also the latest in a broader retreat as energy giants across the world slash their dependence on Russian fuels.

However, while Japanese buyers are avoiding additional spot purchases of Russian LNG, they are still accepting deliveries via long-term contracts.