Nuclear restarts push Japan’s LNG demand down

Japan’s consumption of liquefied natural gas is expected to dwindle due to a slower economy mixed with the restart of the country’s nuclear capacity and increase in renewable sources. 

Platts’ analytics unit, Eclipse Energy reveals that Japan’s demand for LNG is expected to fall from 86 million tons in 2014 to 77 million tons by 2020.

In the first 10 months of 2015 Japan has already bought 3 million tons less LNG than it was the case in 2014.

The country’s utilities are slowly restarting their nuclear reactors, and this is already showing effects on LNG consumption.

Kyushu Electric, that has recently restarted it 890 MW nuclear reactors at Sendai, unloaded seven LNG cargoes at its Tobata terminal, 6 fewer than it was the case in November 2014, according to the report.

In the period from September to November, Kyushu Electric received nine LNG cargoes at the Oita terminal, staying at the same level as in the same period the year before, the report said.

However, it is expected that the restart of Kyushu Electric’s Genkai nuclear reactors will replace up to 4 LNG cargoes per month.

Japan is also expected to import more LNG on long-term contracts, a number that is expected to rise from 82.3 million tons in 2017 to 88.2 million tons in 2019. On the demand side, Japan will see a drop to 77.2 million tons in 2020 from 78.2 million tons in 2017.

Volumes contracted from LNG projects in the United States are predicted to be used during peak winter periods, but Eclipse Energy expects Japanese utilities to use around 25 percent of the total 17 million tons of LNG per year tolling arrangements during 2018 and 2019 with the utilization to reach 50 percent beyond 2020.


LNG World News Staff