About Japan LP Gas Association

1

Contents
1. Latest Trend in Supply and Demand of
LP Gas
2. Actions toward 2025 in LP Gas Industry
3. Imminent Challenges for LP Gas Industry

2

Chapter 1
Latest Trend in Supply and Demandof LP Gas

3

LP Gas Demand: Trend in Japan LP gas demand has been dwindling after the peak in 1996, but in 2015,
it turned upward for the first time in 5 years, mainly driven by severe
winter weather.
(Demand)LP gas demand by sector:
FY2016/FY2017
Unit: thousand tons

Unit: thousand tons

20,00018,000FY2016FY2017

Yr/Yr

16,000Residential

6,275

6,384

102%

14,000Industrial

3,030

3,309

109%

12,000Automobile

985

940

95%

City Gas

995

1,110

116%

Chemical

2,572

2,762

107%

294

182

62%

14,151

14,687104%

10,000
電力用Power■ Electric

8,000

化学原料用
■ Chemical

6,000

都市ガス用
■ CityGas

Electric Power■ Automobile
自動車用

4,000

■ Industrial
産業用

合計■ Residential
家庭業務用

2,000
0
FY2010

11

12

13

14

15

16

17
Source: METI, ” Committee of Forecast of Global Supply and Demand
Trends for Petrochemical Products, Liquefied Petroleum Gas WG”

4

LP Gas Supply by segment : Trend in Japan LP gas supply has recovered to above 14 million tons after hitting the bottom
in CY2016, backed by the latest demand rebound.
Total

15,277

14,454

13,935

14,58914,361

Unit:
thousand tons

Petroleum
Chemistry
Petroleum
Refining

ImportSource: Japan LP Gas Association

5

LP Gas Import sources by country : Trends in Japan (Propane and Butane) Backed by the increasing supply from the US, its share in Japan’s LP gas
import has been growing, reaching 65% in CY2018.
Total

11,574

11,604

10,696

10,521

10,535

10,675 （千トン)

Unit: thousand tons

Source:Japan LP Gas Association

6

LP Gas Import sources by country: Trend in Japan (Propane only) As the butane import from the US has still stayed low,
US’s import share, in terms of propane only, reached 74% in CY2018.
Total

9,153

9,240

8,713

8,588

8,989

9,086

Unit: thousand tons
（千トン)

Source:Japan LP Gas Association

7

LP Gas Price Trend : Originated in the Middle East and the US (MB)(Japan arrival basis)
 Prices of LP gas originated in the Middle East and the US (MB) have been
moving closely in recent years in line with the oil market trend.
($/T)$1,200.0$1,100.0

LP Gas from the Middle East
（CP + Spot Freight ）$1,000.0$900.0$800.0$700.0$600.0$500.0$400.0$300.0$200.0LP Gas from the US（MB + Spot Freight + Terminal Fee + Panama Canal Transit Fee)

8

Crude Oil (AL) Price Trend and CP (Propane) Trend
 LP gas supply & demand balance eased temporarily, backed by the rise of the supply
from the US, which led to the decline of CP’s AL calorific equivalent value below 100%($/T) for the first time in 3 years.
900

Arabian light crude(propane calorie equivalent value)

800
700

Oct. 655 $600

Saudi Arabia CP

500
400

Dec. 445 $300
200
Jul-14
(%)
140
130
120

Jan-15

Jul-15Jan-16

Jul-16

Jan-17

Jul-17Jan-18

Jul-18Jan-19Arabian light crude(propane calorie equivalent value)

AL=100

Saudi Arabia CP

110
100
90
80

Avg/y

70
Jan-1494%
Jul-14

97%
Jan-15

Jul-15Jan-16

Jul-16

92%

109%

100%
Jan-17

Jul-17Jan-18

Jul-18Jan-199Trend of LP Gas Inventory and How Many Days’ Worth of LP Gas was
Stored in Private-sector
Unit: thousand
tons
3500
3000

(1) Trend in Private-sector Inventory (2000 - 2018）
Range of Inventory Volume

Reduced private-sector stockpiling
requirements worked to lower theinventory at the lowest level ever last year.

（High and Low per Month during 2000 - 2017)

2500
2000
1500

Inventory Volume（2018）

1000
1月
Jan

2月
Feb

3月
Mar

4月
Apr

5月
May

6月
Jun

7月
Jul

8月
Aug

9月
Sept

10月
Oct

11月
Nov

12月
Dec

Nov
11月

Dec
12月

(2) How Many Days’ Worth of LP Gas was Stored
in Private-sector in 2017 and 2018
Unit: days

・・・備蓄日数（2018年）
Days Worth of LPG in 201880

Days Worth of LPG in 2017
・・・備蓄日数（2017年）

60

40

20

0
Jan
1月

Feb
2月

Mar
3月

Apr
4月

May
5月

Jun
6月

Jul
7月

Aug
8月

Sept
9月

Oct
10月

10

History of LP Gas Stockpile System in Japan National stockpile target, a quantity sufficient to last 50 days (1.4 million tons, stored in 5
locations) was achieved in November 2017.
 Mandatory private stockpile has been reduced from the level to last for 50 days to that for 40 days
since February 2018.

Year

Mandatory private stockpile

1981

LP gas stockpiles made mandatory withthe revised ”Oil Stockpiling Act”.

1989

Private sector stockpiles of 50-days
worth achieved in March.

National stockpile

1991

National LP gas stockpile target was developed to mitigate
supply disruption risk after the Gulf War :( 1.5 million tons / worth 40 days by 1991 standards).

2005

Nanao Base, Fukushima Base and Kamisu Base completed.

2011

40,000 tons of propane released after the March 11 disaster(replaced by private sector stockpiles).

2013

Kurashiki Base and Namikata Base completed in March.

2016

Government panel proposed to lower
stockpile levels.

2017

Relevant ministry ordinance revised in
December.

2018

Private sector stockpiles reduced to
40-days worth effective from February.

National stockpile target achieved in November 2:50-days worth, or 1.4 million tons.

11Vacancy and Actual Inventory in Base Tank Storage Capacity
 Tank vacancy tends to rise due to the shrinking domestic demand and the reduction of mandatory
private stockpile.
 Industry-wide review on the optimal stations is needed, while ensuring the supply stability.
4,500

Base Tank Storage Capacity*(Unit:thousand tons)

4,000
3,500

1,114

Tank Vacancy

thousand tons

3,000

Compared to FY2001
VolumeUp by approx. 1 million tons

2,003

2,500

thousand tons

2,000
1,500

Basic
InventoryLevel

In Use72%

1,000

Physical Inventory
Quantity**

In Use
45%

500
0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

* Non JLPGA’s member tank storage capacity is not included in this base tank storage
capacity.
** Inventory quantity is calculated as an average per physical year. (As for FY2018, an
average between April and September)

2015

2016

2017

2018
(FY)

Source:Japan LP Gas Association

12

Chapter 2
Actions toward 2025 in LP Gas Industry

13

What and Why “Vision 2025”?
Revision of Basic Energy Plan

Global Market Change(Last update: 2014)
Expectation on LP Gas Industry, newly
mentioned in the Plan
●LPG fuel ships●Expansion of the use of high-efficiency
LP gas fuel equipment●Enhancement of the efficiency of
distribution system with cooperative
networks●Growing production of LP gas
in the US (shale gas / oil )●Global warming issues(Paris Agreement)●Japan’s less presence among importing
countries●Stricter environmental control by IMO

Japan LP Gas Association

Vision 2025
for LP Gas Industry
Business Environmental
Change in Japan●Stagnated demand for LP gas●Reduction of mandatory private stockpile level●Severe competition between various energy
industries● Frequent natural disasters occurrences(earthquakes/ extreme weather)●Labor shortage and shrinking population due tolow birthrate and longevity.

（Last update: 2015)
Ongoing Efforts●Stable supply / Diversification of supply
sources●Improvement of quality and safetymeasures for LP gas●Establishment of an effective and robust
logistic system

14

Critical Pillars for addressing JLPGA’s “Vision 2025 in LP Gas Industry”
Total demand target by 2025: 15 to 16 million tons per year
◆Promotion of the use of high-efficiency
household appliances such as“Ene-Farm”

Ene Farm◆Promotion of air-conditioning in critical
public facilities such as evacuation
center with the use of GHP and LP
gas-powered generator, capitalizing
the strength of LP gas as a resilient
distributed energy◆Replacement of fossil fuels including oilwith LP gas, taking its advantage as
Eco-friendly energy

Gas Heat Pump (GHP) for LP gas◆Streamlining logistics in Japan withthe use of IoT and other advanced
technologies to develop new customer
services
Disaster
Response

RemoteMonitoring of
Gas Supply

Monitoring
Activities in
Daily Living

LP gas power generator

Next Generation LP Gas
Centralized Monitoring System

Offering
Recommendation
for Daily Living

Regional
Alliances

Delivery
Efficiency

15

New Vision (1) LPG Fuel Ships and Bunkering JLPGA aims to expand the use of LPG as a ship fuel, in response to strict ship fuelregulations set by IMO and possible CO2/NOX regulations in the future.

■(1), (2), (3) are not the last resort to tackle the tasks(1) Switching to lowsulfur fuel oil(2) Scrubber(Shipboard Desulfurizer）

LPG Fuel Ship

(3)LNG Fuel Ship

LPG Fuel Ship VLGC Development（Mitsubishi Shipbuilding）

Cultivate the ships’ fuel demand: 8.7 million kl of fuel oil（equivalent to 5 million tons of LPG）

■Tasks to encourage broaduse of LPG fuel ships

LPG is eco-friendly almost equivalent to LNG and more economicallyefficient than LNG in terms of supply infrastructure costs etc.

 LPG engine development
 LPG supply infrastructure

・Negotiations with Port Promote LPG ’s publicity

Authorities

 Applications to authorities

・Negotiations with Maritime(including standardization of
bunkering safety)

Safety Agency etc.
・Ensuring safe navigation
・ Build bunker supply vessels

Property Comparison

Liquid NaturalGas (LNG)

Liquefied Petroleum
Gas (LPG)

Boiling Temperature

-162℃

-42℃

Heating Value (LNG, Propane)

40 MJ/m3

99 MJ/m3

Specific weight of liquid
Environmental
Performance*(to heavy oil)

0.42

0.58

CO2 Reduction Rate

23%

20%

SOx Reduction Rate

90-97%

90-97%NOx Reduction Rate

20-30%

15-20%*Source: LPG for Marine Engines/The Marine Alternative Fuel (WLPGA)

16

New Vision (2) Promotion of the use of LPG Vehicles and Infrastructure
Building JLPGA aims to accelerate the diversification of fuel supply for transportation throughthe approach to encourage public administrations to introduce LPG vehicles andrequest for easing regulations for better infrastructure.
［Autogas consumption and the number of LPG vehicles］
Unit: thousand tons
Consumption

1,626 1,594 1,570 1,486 1,409

1,370

1,295

1,231

1,177

1,110

1,054

985

LPG cars■Proposal of LPG vehicle introduction
to local government (Kanagawa pref.）962

Autogas Station

350,000

2,000
1,800 1,774

250,000

1,576 1,572

1,513 1,503 1,498

1,458 1,440

1,800
1,600
1,400
1,200

200,000

295,124

100,000

Number of Autogas Station
オートガススタンド(箇所)1,713 1,700
1,622 1,612

300,000

150,000

ＬＰガス自動車台数（単位：台）Number of LPG Vehicles

1,000

LPG Bi-fuel vehicle（LPG & Gasoline）

287,480
293,959800
277,437 251,076
291,529265,267
248,733 234,236
241,886
226,450 210,234 600
218,218400

50,000200
002005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 （FY）

JPN TAXITOYOTA

NV200
NISSAN
17

New Vision (3) LPG demand for City Gas and Chemical Use JLPGA aims to maintain and increase the demand by taking its advantage,
while keeping a close eye on the price trends of naphtha and LNG.
For City Gas Use

For Chemical Use■Forecast of Global Demand Trends for Petrochemical Products
FY2018-2022, Liquefied Oil Gas Sector (Advisory Committee for Natural
Resources and Energy, Natural Resources and Fuel Committee, Petroleum and Natural
Gas Subcommittee, Petroleum Market Trends WG)$/ton

Comparison: CIF Price in LPG equivalent(Foreign Trade Statistics)

1,500
1,400

City Gas Demand Forecast

1,300

Unit:
thousand tons

:Y/Y

1,200
1,100
1,000
900
800
700
600
500
400
300

FY2018FY2019FY2020

FY2021

FY2022

Demand Forecast

LPG

Naphthaナフサ

200

It is also necessary to pay close attention to the discussions at theRegulatory Reform Promotion Council on the City Gas calorificregulation

18

New Vision (4) Advanced Logistics and Building of Next Generation
Infrastructure in Japan JLPGA aims to develop new customer services for next generation infrastructure with utilizing the
evolving communication technologies so that LP gas remains as an energy to be selected.
Monitoring the remaining quantity by IoT
Delivery efficiency improvement with AI
Remote Meter
ReadingHigh-density & highfrequency data uploading, andhigh-level information
processing at data centers

Centralized
Monitoring

Customer Management
Data（including
security control data）

Data Center

High-level centralized
monitoring network with
LPWA

Low-Power WideArea (LPWA)

Communication
DeviceInformation Gateways with
Smart Gas Meter System

Big Data Processing
Weather
Forecast Data

Improvement of delivery workforce
in response to labor shortage

Areas LPG
industry is
promising

Effective Sales Administration
Additional
considerationneededTraffic Jam
Data

Response to the Connected Industries
Smartphone
Expecting a Delivery Efficiency Improvement by 20-40%

Deliverer
Data

Delivery
Instructions

DeliveryCar
Data
Data Center
SupplyStation Data

Identifying a smart
home for LPG andservice proposal

Offering high value-added
customer services via Internet

Energy selected by customers withnew services

Internet

Security and monitoring
Information

Base
StationTraffic
Jam

Cross-border
supply station
Delivery data
sharing

DetourPossibility of Data Sharing with
Local Governments

19

Promoting cooperation by visualizing its effects

Chapter 3
Imminent Challenges for LP Gas Industry

20

Installation Rate of Air Conditioners (AC) in Public Elementary andJunior high SchoolsThe government allocated ¥82.2 billion of budget to install ACs in the remaining (unequipped) 170 thousands
ordinary classrooms of public elementary and junior high schools across Japan.

Only 1% of school gyms have ACs. Further installation of ACs is required.
Specialpurpose
Classrooms

Ordinary
Classrooms

Number of schools designated as evacuation center

Ordinary + Specialpurpose Classrooms

Source: Education Ministry

Total

AC installation rate inordinary and specialpurpose classrooms:

Aug 2001

Designated as Shelters

33,63830,994（92.1%）

Installation
rate of AC

41.7%

Oct 1998

Schools

1.2%

Aug 2004

Jul 2007

Oct 2010

Apr 2014

Apr 2017

Installation Rate of Air Conditioners in Public Schools

Completion Target:
by Summer of 2019.

FY2018Supplementary
Budget (cabinet
approval)

Source: Disaster Photo Database, INSTITUTE OF SCIENTIFICAPPROACHES FOR FIRE & DISASTER

Contents

Installation of ACs in all ordinary classrooms (170thousands) of public elementary and junior high schools,
kindergartens, and special-needs schools

Budget82.2 billion yen
21Further Installation of Air Conditioners in Schools (Classrooms and Gyms) by
Introducing LP Gas Heat Pumps
 Gyms contribute to local communities, as evacuation centers in case of disasters as well as serving
for ordinary classwork.
 Installation of air conditioners is vital since extreme heat in mid-summer or severe cold in mid
winter during a disaster evacuation could risk even people’s lives.
 Combination of emergency power generators, bulk supply units, cooking utensils, and other tools
can strengthen their functions as evacuation centers in case of disaster or power outage.

■ What is GHP︖
[GHP] is an air conditioning system run by agas engine which drives compressor to movea heat pump.

■GHP Mechanism[Rooftop]
GHP (Outdoor
Units)Heatstroke
Prevention

Gas
EngineLP Gas[Classrooms]
GHP (Indoor Units)

Use ofExhaust Heat

Compressor
Press Machine

Condensates

LiquidEvaporator

Heat Absorbing

Gas

Gas
LiquidHeat Releasing

Heating

Cooling

Expansion
Valve■Gas Energy benefits• Contribution to curbing the electric consumption
peak with its power-saving capability.
• [Use of exhaust heat] when heating.
• [Stand-alone running functionality] on
emergency such as blackouts.

Improvement of
Evacuation Centers’
Functions

Bulk Supply System[Gyms]
GHP (Indoor Units)

22

GHP Introduction Examples in Local Governments(including installation in gyms)(1) Minoh City, Osaka Pref.
•••

The city is located in city gas service area, but the local government has
selected LP gas for the sake of prioritizing disaster countermeasures.
56 units of LP gas GHP have been installed in 20 gyms of the local
elementary and junior high schools in the city.
LP gas-powered emergency power generators also have been installed.

(2) Kumamoto City, Kumamoto Pref.
••

With the lessons from the Kumamoto Earthquakes in April 2016,
countermeasures against power outage at the local elementary and juniorhigh schools, which are designated as evacuate centers, have been
reinforced.
Stand-alone-type LP gas-powered GHPs have been installed in 53 local
schools on a one-to-one basis.

(3) Fujimi City, Saitama Pref.
•••

Disaster countermeasures in response to the outcome of the Great East
Japan Earthquake, curbing the maximum power consumption, and othermeasures are considered.
LP gas-powered GHPs have been introduced into the city gas service
areas.
Emergency bulk storage units are used for fuel supply.
23

Trend of GHP Shipments
 After the Great East Japan Earthquake in March 2011, introduction of stand-alone-type power
generators, which can supply electricity for air conditioners in case of power outage, had boosted
the shipments of LP gas-powered GHPs for 5 consecutive years.
 However, since 2017, the trend has turned to level off.（e.g. GHP shipments of the 1st half of 2018
was 99% year on year)
 To expand the use of LP gas-powered GHPs, development of production system and expansion of
installation work capability at manufacturers as well as financial support from the government isneeded.
3530・・・LP gas-powered GHP・・・City gas-powered GHP

25
20

4,262

5,099

5,346

Unit: thousand
tons
（千台）

5,997

AISIN SEIKI Co.,Ltd.

6,349
6,236

DAIKIN INDUSTRIES, Ltd.

3,819

15
10

GHP manufacturer

Panasonic Corporation
17,89923,03924,18924,11325,07824,12322,499MITSUBISHI HEAVY INDUSTRIESAir-Conditioning and Refrigeration
Corporation

5
0

2011

2012

2013

2014

2015

GHP Shipment Trend

2016

2017
Fiscal（年度）
Year

YANMAR Co., Ltd.
(GHP Consortium member companies listed in order of
50 Japanese syllables)24

Countermeasures to the 2018 Hokkaido Eastern Iburi Earthquake taken
by LP Gas Industry
 The Hokkaido Eastern Iburi Earthquake on Sept. 6, 2018, led to the serious
impact on lifelines such as broad range of power outage for almost two days.
Massive power
outage2.95 million
households andoffices
Magnitude atepicenter︓
Estimated 6.7

Status at LP gas facilities
Japanese
seismic
intensityof 7•Core Supply
StationOver 6•

Over 5

Core supply stations in Hokkaido
Source: Japan LP Gas Association•

Most of households
suffered power outage forabout 2 days. (On October
4, power restoration wascompleted.)

During the power outage, supply andshipment of LP gas was maintained at 14 coresupply stations.
25 out of 31 LP gas bulk storage units fordisaster supply in Hokkaido had emergency
power generators⇒ All generators worked smoothly（at hospitals or welfare facilities)
Mobile power generator cars were lent toevacuation centers or local municipalities.
25

Expansion Use of Bulk Storage and Supply System in Preparation for
Disasters
 In FY2019 budget (including 2nd supplementary budget), 3.15 billion yen (5 times higher yr/yr) is tobe set for securing fuel stockpiles to maintain emergency power sources and air-conditioning as apart of self-reliant efforts at critical social infrastructure including evacuation sites andmedical/welfare facilities.

Main subsidy system:

KitchenInstrument

DuringNormal Times

Gas Heat
ＧＨＰ
Pump
(GHP)

Gas Water Heater

Bulk Supply System

In Case ofDisasters

Emergency power generators

Hospital

SchoolHospitals, nursing homes, public
evacuation centers, temporary
evacuation sites

Grants(1) Private facilities: 2/3(2) Public facilities: 1/2

Budget

0.6 billion yen（FY2018）

increasedby 5 times
Temporary Public BathSoup Runs

Site

Already installed atmore than 500 places

Evacuation
center

FY2018 2nd supplementarybudget 0.83 billion yen
FY2019 Budget
2.32 billion yen

Total 3.15 billion yen
26

Maintaining and Securing Supply Chains in Case of Disasters based on
the Emergency Supply Collaboration Plan Aiming to maintain and secure the LP gas supply chain by keeping trainings based on the“Emergency Supply Collaboration Plan” in preparation for disasters.
■Emergency Supply Collaboration Plan

LP gas importers（Wholesalers）

The New Oil Stockpiling Act, Article 14: specifies petroleum gas importers must
collaborate with each other to secure stable supply of LP gas to 9 areas acrossJapan in case of disasters.
Trainings are carried out in preparation of
implementation of the Emergency Supply
Collaboration Plan

<Application Items>
1. Liaison
2. Joint use of gas storage facilities and workplaces
3. Cooperation in transportation of LP gas
4. Participation in local disaster prevention agreement
5. Trainings＜Flow of Emergency Supply Collaboration Plan＞
LP gas supply shortage in specific areas due to disaster

Four key stations have mobile power generator cars.
(All 7 stations have receivers.)
A database system of tank trucks has been prepared.
Satellite communication equipment is allocated.

LP gas sellers(Brokers and retailors)

Setting up of Disaster Control HQCollaborative Base Use Support G.
Communications Group
Disaster and Recovery Record GroupLPG Supply

Specified LP gas
importers, etc.

Information gathering group
・State of Damage
・External Market Status, etc.

Request for
supplyAdministrator: Japan LP Gas Assoc.
RequestMETI Agency for Natural
Resources and Energy

Request for
Support（ LocalDisaster Area）
government etc.

Minister of METI recommends specified petroleum gas importers to
implement the Emergency Supply Collaboration Plan

Delivery stations are available among key stations basedon the Mutual Assistance Agreement

Collaboration with local governments
342 supply stations are designated as “core supply
stations” those have:・Private LPG power generators
・LPG dispensers
・LPG cars, delivery cars
・Satellite communication equipment

27

Training to Connect with Mobile Power Generator Cars andMaintenance including its Power Receiving Facilities Mutual support network linking 7 key sites has been established so that LPG shipping
function is maintained if any local LPG station lost its power source in case of disasters.
■Mobile Power Generator Car*METI: FY2012 Petroleum Gas Station Shipping Function Reinforcement
Project Subsidy (Regarding the Petroleum Gas Import Station Shipping
Function Reinforcement Project (mobile power generator cars) ) and othermaterials■7 Key Stations

・ENEOS Globe Gas Terminal- Aomori Gas Terminal- Niigata Gas Terminal- Nanao Gas Terminal
・Marubeni Ennex Corporation Chiba Terminal
・JXTG Nippon Oil & Energy Corporation Kawaski LPG Station
・Yokkaichi LPG Station Kasumi Office・Kyushu Liquefied Gas Fukushima Station

・Overall Length
9,910 mm
・Fuel (for running and power generation)
Diesel Oil・Electric output
1,000 kVA・Maximum run length 150 h■Training implementation（all of 7 key stations/each year)＜Deployment across Japan＞
Power generator car andpower receiving equipment
Kawasaki, Nanao, Yokkaichi,
Fukushima
Power receiving equipment only
Aomori, Niigata, Chiba

Aomori
Niigata
Nanao

Fukushima
Yokkaichi

Chiba
Kawasaki28

Japan LP Gas Association’s New Logo
 The new logo was designed in the motif of the sun, the symbol of Japan’snational flag, and the globe. Its spherical shape was wrapped by threeribbons that symbolize “Development of the industry,” “Unification of theindustry,” and “Contribution to the society”.
 The color of those ribbons is blue that symbolizes “Message from the blue
flame,” which is this year’s slogan of JLPGA.

29

[Summary] Future Effort of the LPG Industry

30