State-owned Japan Oil, Gas and Metals National Corp (JOGMEC) will be allowed to buy liquefied natural gas (LNG) on behalf of utilities when normal procurement by private companies becomes difficult, under a plan approved by the Cabinet on Friday.
The government is putting contingencies in place to safeguard energy security amid the growing risk of reduced flows from Russia to a global market that is already suffering tight supplies and sky-high prices.
"With the growing uncertainty of LNG supply against a backdrop of increasing global demand, changing international conditions and unexpected accidents, we are taking measures to prepare for any crisis that may cause serious disruptions to gas supply," Industry Minister Yasutoshi Nishimura told a news conference.
Under the plan, which has to be approved by parliament, the gas business law will be amended to allow the government to order large users of city gas to restrict consumption when shortages risk adversely affecting the national economy and people's lives.
The contingency scheme has been discussed since July by a working group of external energy experts.
A separate panel is looking at nuclear power issues as Prime Minister Fumio Kishida has instructed the industry ministry to come up with strategy by the year-end.
Asked about a media report that the government is considering extending its 60-year limit on the operation of nuclear power plants, Nishimura said: "No concrete policy has been decided." (Reporting by Yuka Obayashi; Editing by Muralikumar Anantharaman & Simon Cameron-Moore)