Woodside gas worker

Russia and the US are two of the major competitors to Australia’s gas exports to Japan.

Competition for the next round of gas export projects in Australia is becoming more intense, with Russia likely to join the US in supplying additional gas into the key Japan market.

The shutdown of Japan’s nuclear power stations in the wake of the Fukushima meltdown has pushed up Japan’s imports of gas, as it looked to alternative fuels to keep the lights on and industry running. In turn, that has plunged the country’s external account into the red, prompting the Japanese government to pressure importers to squeeze gas import prices.

As a result, its power utilities have begun to assess investing in some of the new round of gas projects being promoted in the US and Canada, which promise to supply gas with a price linked to the domestic US gas price, the so-called Henry Hub spot price, which is used as the basis for NYMEX gas futures contracts.

The shale gas boom in the US has pushed gas prices in North America back towards long-term lows, which is encouraging some groups to look to export markets in both Europe and northern Asia.