On 11 July European Commissioner for Climate Action and Energy Miguel Arias Cañete and Japanese Minister of Economy, Trade and Industry Hiroshige Seko signed a Memorandum of Cooperation between the EU and Japan on promoting and establishing a liquid, flexible and transparent global Liquefied Natural Gas (LNG) market. Under the Memorandum, the EU and Japan will exchange experience and undertake joint activities to spread best practices to improve the functioning of the global LNG market. These include flexibility in contracts for LNG sale and purchase, the organisation of gas hubs in consumer markets, price transparency and reporting. They will also enhance their coordination in international fora and organisations in the area of energy, in particular regarding responses to unexpected gas market disruptions. The objective is to involve all LNG producers and consumers in joint activities to promote the liquidity, transparency and flexibility of the global LNG market. This will help ensure competitive LNG supplies and improve the resilience of the international market and its capacity to respond to emergencies.
Commissioner Arias Cañete said:
A more liquid, transparent and flexible LNG market will contribute to the diversification of gas supplies in Europe. This will not only strengthen our energy security, but will also lead to more competitive prices for consumers. This Memorandum of Cooperation is an important step in the process, and is part of the EU's wider cooperation with Japan in the field of energy.
Minister Hiroshige Seko said:
Today, I am very pleased to reach the signing of this Memorandum of Cooperation between Japan and the EU. Collectively, Japan and the EU account for nearly 50% of global LNG demand. In close cooperation with the EU, Japan will lead the world’s efforts in enhancing a liquid global LNG market, including the abolishment of restrictive destination clauses.
The Memorandum is a concrete illustration of the strengthened bilateral partnership between the EU and Japan, following the Summit held on 6 July, at which an agreement in principle was reached on the EU - Japan Economic Partnership Agreement (EPA) and Strategic Partnership Agreement (SPA).
Taken together, the EU and Japan account for nearly 50% of overall global LNG consumption. Reinforced cooperation between the EU and Japan has the potential to decisively enhance the liquidity and flexibility of the global LNG market. The EU strategy on LNG and gas storage, published in 2016, aims to improve security of supply and competitiveness through increased diversification focusing in particular on the most vulnerable regions such as South-East Europe, the Baltic region and the Iberian Peninsula. Ensuring that all countries have access to liquid gas markets with a diverse range of supply sources, including LNG, is a key objective of the Energy Union. For Japan, the world's largest LNG importer, secure LNG supplies are strategically important. Japan also published a strategy for LNG market development in 2016, aiming to create a flexible global LNG market and develop a LNG trading hub in Japan.
Watch the press conference that took place after the ceremony.