Foreign & Commonwealth Office of the UK published a research and analysis prepared by UK Trade & Investment on Japanese LNG imports and nuclear restarts.
A couple of major decisions in Japan will affect global LNG markets, claims the report. Two Japanese utilities team up to become the largest single global importer of LNG; the Japanese government is using gas reform at home and exploration abroad to try to reduce their LNG bill. And the first two nuclear restarts receive political approval with final technical hurdles to overcome. 4-6 restarts possible by mid 2015.
In the first week of November, during the third global LNG Producer-Consumer Conference , the Tokyo Electric Power Company and Chubu Electric established a single company to combine their gas businesses. The new company will import 39 million tonnes of LNG per year, becoming the world’s largest single LNG customer with 16% of global demand (more than five times that of the UK). Japan remains the largest importer of LNG with 37% of global demand. Tepco and Chubu’s alliance is likely to expand into other energy areas beyond LNG.
Report finds that despite projections that global LNG supplies will double by 2020, Asian prices remain stubbornly high. Japan is particularly keen to reduce them, the huge burden of importing fuel to replace idled nuclear reactors continues to create a national trade deficit. Japan plans to do achieve it by:
The second development highlighted by the FCO concerns Japan’s 48 nuclear reactors that have been idle for the last two years. But 7 November saw political approval for the restart of two reactors at Sendai Nuclear Power Plant (local government signed off the restart). Further technical and regulatory requirements are likely to take until at least February. Two further reactors could be granted initial safety approval soon. So up to 4-6 power stations could be running by the summer.
Inter alia, Japan’s nuclear restarts impact:
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Press Release; Image: gov.uk