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U.S., Japan to Cooperate on LNG Projects Throughout Asia

The U.S. and Japanese governments said they plan to continue their cooperation in the energy sector by providing training, financing and technical assistance to countries within the Indo-Pacific region, ostensibly to promote U.S. liquefied natural gas (LNG) exports to Asia.

At a roundtable Monday hosted by the U.S. State Department and the Japanese Ministry of Foreign Affairs, more than 150 government officials and representatives from the private sector "identified specific activities in the areas of commercial cooperation, joint financing and risk mitigation, policy advocacy, and capacity building" in the energy sector and other areas, the agencies said.

The Second Public-Private Sector Roundtable Discussion on U.S.-Japan Cooperation on Third Country Infrastructure was hosted by Vice President Pence and Japan’s Deputy Prime Minister Taro Aso.

According to the agencies, the United States and Japan plan to enhance their support for LNG infrastructure projects across the Indo-Pacific region.

Under one area of collaboration, the U.S. Trade and Development Agency and Japan's Ministry of Economy, Trade, and Industry (METI) would assist Vietnam and the Philippines with personnel training and other capacity building assistance. The assistance would help Hanoi in Vietnam and Manila in the Philippines to "strengthen and improve procurement practices," as well as support LNG infrastructure projects throughout Southeast Asia.

The United States and Japan also plan to cooperate on commercial LNG projects for power generation in Bangladesh, Indonesia and the United Arab Emirates.

Kyodo News reported that the Japan Bank for International Cooperation (JBIC) plans to offer loans to support LNG facility construction in Asia, while the Nippon Export and Investment Insurance (NEXI) would provide disaster and accident insurance associated with LNG sea transport. JBIC and NEXI are owned by the Japanese government.

The roundtable comes less than five weeks after the Trump administration levied new tariffs on steel and aluminum imports. President Trump, who made trade an issue on the campaign trail, withdrew the United States from the proposed Trans-Pacific Partnership (TPP) shortly after taking office. Earlier this month Trump and Japanese Prime Minister Shinzo Abe reportedly agreed to hold trade talks, which may occur as early as mid-June. Japan is a signatory of the TPP.

"In terms of economic issues, it was agreed that consultations would begin for free, fair and reciprocal trade, which will further expand trade and investment in both countries," METI chief Hiroshige Seko said in an interview last Friday. "Based on the fair rules which would be established with such a firm economic base between the two countries, we will make efforts to realize open-and-free economic development in the Indo-Pacific region."

U.S. exports of LNG to Asia are on the rise. Last month, the Energy Information Administration found that 53% of U.S. LNG exports in 2017 were shipped to three countries: China, Mexico and South Korea. The International Energy Agency is predicting that the United States would become the world's largest LNG exporter by the mid-2020s. Japan has increasingly looked to LNG imports following the 2011 Fukushima Daiichi nuclear power plant disaster.

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