June 02, 2012
With the shutdown of nuclear power plants, Japan requires increased volumes of liquefied natural gas (LNG) imports. At the same time, production of shale gas has completely changed the market for natural gas in the United States from shortage to excess, resulting in a large price gap between prices in the US and Japan.
The intersection of these two developments was the focus of a seminar hosted by Latham & Watkins, which brought together a number of partners from the firm’s Tokyo, Houston, Washington, D.C., Singapore and London offices. Drawing on decades of knowledge and experience in the field, the panelists shared their insights on a range of hot button issues including an overview of the US gas market, the economics of gas pricing and an analysis of current and future gas supply, Japanese investment in the US gas market, project development and financing, and key environmental issues, among other topics.
A broad cross-section of more than 80 delegates representing the industry attended the seminar, including stakeholders from government, corporations, financial institutions and consulting firms.
“This is a high and rising boardroom issue; one that has far-reaching and important industry and economic consequences,” said Joseph Bevash, Office Managing Partner of the Tokyo office of Latham & Watkins. “Against this backdrop, we were delighted to convene this senior level seminar where my partners from around the globe were able to share their perspectives on these critical issues. Unsurprisingly, given the geopolitics and the complexity of the market dynamics, there are big, thorny issues at play and the stakes are high.”
“Forecasts put potential LNG reserves in the United States at significant levels, on par with other leading producers of natural gas. The seminar discussed the important challenges and obstacles for permitting, financing and the construction of a number of LNG projects in America. Whether the United States becomes a major exporter of LNG seems, in part, linked to whether all of these projects come on stream,” said Bill Voge, a preeminent project finance partner based in the firm’s London office.
Michael Yoshii, a corporate partner in Latham’s Tokyo office, added: “The lively discussion confirms the strong interest among Japanese companies in US LNG as a vitally important alternative to nuclear power. While not the panacea to Japan’s power needs, US LNG exports have the potential for huge impact and will be a significant driver for economic growth.”