Indonesia’s coal issue puts Japan on alert

The republic’s regular client is now considering liquefied natural gas (LNG) as alternative

Japan is reportedly waiting for its coal shipment from Indonesia that was delayed due to the recent curb to address domestic shortage. The country is now evaluating contingencies if its regional coal supplier (Indonesia) is prepared to write itself off.

Possible shift to LNG
Panic was certainly an understatement ever since Indonesia imposed a month-long ban for coal exports, aggravated by the permit revokes of thousands of miners and plantations. While the country recently granted 14 coal-loaded vessels to depart, no further details were disclosed on how many within were bound for Japan.

Analyst S&P Platts noted the Indonesian government extended provisions for vessels to be released for export after a meeting involving top government officials and state-owned PT Perusahaan Listrik Negara (PLN). An apparent improvement in domestic supply at both PLN and independent power producers warranted the ban ease. A decision on export resumption will follow after a cross-ministerial team’s assessment.

While Japan waits for Indonesia’s verdict, it is on high alert monitoring the situation. It imports some 13 per cent of coal from Indonesia – which does not cause any alarm. It also stocked up a month’s worth of supply. The country’s 6^th largest power generator, Japan’s Electric Power Development Company (J-POWER) is also prepared to procure from other sources if Indonesia strikes itself off. The company imports coal majorly from Australia (over 60 per cent). Yet, the largest enterprise, JERA was unfazed and remained confident of its Indonesian coal supply.

In spite of that, JERA had its own facility issues. Its Hekinan thermal power plant suffered an unplanned shutdown on 16 December 2021 from a technical fault. The company was planning to resume operations on 19 February 2022. The long pause resulted in industry observers speculating a shift to LNG, as they observed JERA’s hiked consumption. One trader claimed JERA’s original plan of Hekinan plant resumption was in end 2021 but it did not take place, and LNG is being considered as an alternative source of power generation.

Marine Online News Team
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