Warren Buffett-Backed Trading Giant's Warning: LNG Shortage Threatens Global Energy Shift

Mitsui & Co.MITSY, one of Japan’s leading trading houses, has warned that global demand for liquefied natural gas (LNG) will likely exceed supply expectations, and the current project pipeline will not suffice to meet this demand, especially in the context of the ongoing energy transition. 

What Happened: "Announced projects in the world still won't make up for the supply needed when considering the energy transition that will take several decades,” Kenichi Hori, the President of Mitsui, said, Bloomberg reported. 

The company, along with other major Japanese trading houses, is deeply involved in fossil fuels. Warren Buffett‘s Berkshire Hathaway BRK BRK increased its stake in these firms back in June. 

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While LNG is viewed as a cleaner fossil fuel to reduce emissions, tight supply conditions are expected to persist until around 2026 when new projects are set to begin operation. 

Why It Matters: Mitsui recognizes the importance of diversifying supply sources for energy security, and Hori noted that the Middle East, including Qatar, remains a vital LNG source for Japan’s diversification efforts. 

Besides gas and LNG, Mitsui is focusing on other pathways for the energy transition, including renewable energy, ammonia, and hydrogen. They have announced substantial investments in offshore wind projects and are exploring opportunities in e-methanol. 

Mitsui envisions its portfolio evolving from traditional energy to a low-carbon-intensive era. They also plan to increase dividends when their base profit earnings power rises. 

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