AUGUST 2026
Japan’s LPG sector is undergoing a significant structural transformation as declining domestic demand forces companies to rationalize infrastructure and rethink long-term supply strategies. Over the past two years, the country has closed LPG storage facilities with a combined capacity of more than 628,000 tonnes, reducing total national storage capacity by 15% amid a broader decline in LPG consumption. Although population decline in rural areas has contributed to lower consumption, the primary driver has been a combination of rising energy efficiencies, displacing traditional LPG space heaters which resulted reduced seasonal winter demand peaks. Japanese LPG imports have steadily fallen from 10.8 MMt in 2022 to around 10.2 MMt in 2025, while long-term demand expectations continue to weaken.
Industry consolidation has accelerated as importers and distributors seek to reduce costs associated with ageing infrastructure. Astomos, Japan’s largest LPG importer, has closed major facilities at Tokuyama, Namikata and Hekinan while partnering with competitors such as Gyxis and Japan Gas Energy to streamline distribution. Refiner Eneos has also shut several LPG storage facilities and continues to scale back refining and petrochemical operations in response to weakening domestic demand and increasing overseas competition. At the same time, many former LPG facilities are being repurposed for ammonia storage as Japan develops supply chains for low-carbon fuels, especially for power generation. Idemitsu has announced plans to convert storage capacity at the Tokuyama and Namikata import terminals to ammonia handling by 2030.
Despite shrinking consumption, Japan is expected to maintain relatively stable LPG import volumes due to lower domestic production and as energy security remains a national priority. LPG imports are forecast to increase 1% in 2026 to 10.3 MMt due to a 6% drop in domestic production. Imports are expected to decline 1% each year in 2027 and 2028 to 10.1 MMt and 10 MMt, respectively. Refinery LPG production fell from 3.1 MMt in 2021 to 2.2 MMt in 2025 and is expected to decline further to 2.1 MMt/y by 2028. There is downside risk to the import forecast as it is increasingly pressured by improved energy efficiency, population decline and falling autogas consumption as hybrid and electric vehicle adoption increases. Increased city gas demand may offset part of the decline, but Japan’s long-term reliance on imported LPG appears increasingly entrenched.
This excerpt is taken from Poten’s LPG Market Outlook. Complete the form below to learn more or request a trial.