Japan has, since the mid-nineteenth century, risen to become one of the world's most industrialised countries. Its rise is all the more remarkable because the island nation has very limited domestic supplies of the natural resources that have typically powered industrial growth in other parts of the world. Today, Japan imports virtually all of the oil, natural gas and coal that together make up almost 85 of its energy supply.
Japan has traditionally relied on the Middle East for its oil imports, while Australia is its main source of liquefied natural gas LNG. But as the country continues to wrestle with its never-ending energy security issue, it has begun to look at African markets as options for diversifying supply. Last June, for example, the Nigerian National Petroleum Company NNPC shipped LNG to Japan for the first time.
And, as it looks to the future, Japan is increasingly interested in exploring the uses of green hydrogen and green ammonia. This is where a partnership with Africa has the potential to be a game-changer.
Mixed fortunes in MozambiqueThe African energy development that has seen the greatest Japanese involvement is undoubtedly the LNG project offshore from Mozambique. A joint venture between Japanese trading house Mitsui and the state-owned Japan Oil, Gas and Metals National Corporation JOGMEC holds a 20 stake in the Area 1 block operated by TotalEnergies.
The Japan Bank for International Cooperation, a publicly-owned financial institution, signed off a 3bn loan for the project in 2020 as part of an international consortium. Several of Japan's largest private banks, including MUFG Bank, Mizuho Bank, Sumitomo Mitsui Banking Corporation SMBC and Sumitomo Mitsui Trust Bank, also participated in the consortium, while Nippon Export and Investment Insurance provided loan insurance.