The government is considering support measures to make it easier for companies to enter into long-term purchase contracts for liquefied natural gas, to ensure a stable supply of the super-chilled fuel, the industry ministry said Wednesday.

At a meeting with energy experts to discuss fossil fuel procurement, the Ministry of Economy, Trade and Industry (METI) outlined possible measures, including financial support for securing storage tanks in Japan and abroad, and a new program to assist LNG buyers committing to long-term contracts.

Details are still being finalized, a ministry official said.

Gas-fired power generation accounts for about 30% of Japan's power mix. Japan, the world's second-biggest LNG importer, faced heightened energy security risks after Russia's invasion of Ukraine, which led to soaring spot LNG prices and subsequently increased electricity costs.

To mitigate these risks, METI is exploring measures to support Japanese power and gas utilities in securing long-term LNG contracts, as LNG remains a crucial fuel source for Japan.

From an energy security perspective, the ministry is also considering forming an index to assess how much LNG Japan can stably procure and use relative to its needs.

Other measures include a government-led initiative to secure LNG in emergencies, potentially through a prearranged agreement between gas suppliers and the government, with a fee paid to ensure supply, the ministry official said.

At the meeting, METI emphasized the importance of diversifying sources for crude oil procurement as Japan relies on the Middle East for 95% of its oil.

The ministry also stressed the need to secure a stable supply of thermal coal, despite the global shift away from the dirty fuel.

The ministry said that the rapid divestment from upstream coal assets, especially in developed nations, could create a discrepancy between global supply and demand. METI underscored the benefits of coal, such as its low cost per heat unit, and Japan's need to maintain varied energy sources.