Japan's gas distributor, Tokyo Gas, is currently in discussions with several US liquefied natural gas (LNG) suppliers to finalise a long-term purchase agreement, reported Bloomberg.

This strategic move is in response to Japan's increasing reliance on LNG as a critical energy source.

The company is engaging with at least four suppliers along the US Gulf Coast, with names such as Energy Transfer and Commonwealth being mentioned by sources familiar with the negotiations.

The details of the talks remain confidential as the involved parties have either declined to comment or have not responded to inquiries.

This initiative is part of Japan's broader preparation for an anticipated surge in power demand, driven by the growth of data centres and semiconductor manufacturing.

The Japanese Government views LNG as an essential component of the nation's energy security and is seeking to secure supplies that could extend beyond 2050.

US-sourced LNG is particularly appealing due to its contractual flexibility, which allows Japanese buyers to redirect shipments based on fluctuating domestic needs or more favourable global prices.

In addition to securing LNG supplies, Tokyo Gas is also bolstering its presence in the US gas market.

The company acquired shale drilling company Rockcliff Energy in late 2023 and has reorganised its US portfolio, including purchasing assets from Chevron in east Texas and divesting its Eagle Ford stake to Shizuoka Gas.

In February, Tokyo Gas acquired a 20% stake in FGEN LNG, the owner and operator of an offshore floating LNG terminal in Batangas City in the Philippines.