TOKYO -- Japan will offer cheap loans and insurance to exporters shipping American liquefied natural gas to Asia and elsewhere, aiming to chip away at the U.S. trade deficit.
As early as this year, Japanese trading houses, petroleum wholesalers and other businesses exporting American natural gas to third countries will become eligible for low-rate financing from the Japan Bank for International Cooperation and discounted insurance from Nippon Export and Investment Insurance. Insurance premiums are expected to fall by around half compared with now.
Companies procuring LNG for shipment to Japan already enjoy these subsidies. Broadening eligibility will make building facilities overseas for receiving LNG cheaper and easier.
This policy arose from ongoing economic talks between the U.S. and Japan. Tokyo will explain the arrangement more fully at a Monday roundtable on U.S.-Japan infrastructure cooperation in third countries.
Japan envisions the program reducing the American trade deficit by promoting LNG exports. The government hopes that this will soften the Trump administration's demands for a free trade agreement with Japan.
The two countries will also team up to train workers in Vietnam, the Philippines and elsewhere to assess the feasibility and environmental impact of infrastructure projects. A shortage of such expertise poses hurdles to projects in these countries, and training is seen paving the way for more American LNG to be exported to Asia.
U.S. exports of LNG are projected to increase 60% on the year in 2018. By 2022, American LNG will account for nearly a fifth of the global market, according to the International Energy Agency.