Japan's additional demand for LNG in the wake of this year's devastating March 11 earthquake and tsunami in the country's northeast, and the resultant shutdown of nuclear power generation capacity, is expected be around 10 million-15 million mt/year, delegates at the Australian Gas Conference in Sydney heard Tuesday.
Over April-September, Japanese LNG demand was around 5 million mt higher than in the corresponding period of 2010, Atsunori Takeuchi, Tokyo Gas's chief representative in Asia Pacific told the conference.
"The tsunami effect is around 10 million mt/year and in the maximum case, 12 million mt/year," he said. "If you compare the LNG demand and supply for next year, taking into account the tsunami additional volume, even in the maximum case there will still be a surplus of 20 million mt," Takeuchi said. "But this scenario doesn't take into account the current bad economy, so the surplus will expand more. In the long term, LNG demand is satisfied by enough supply," he added.
The Japanese market for LNG remained at 70 million mt/year from 2007 to 2010.
"The tsunami effects will be limited, and rather than the tsunami we are afraid of the recession which threatens the world," Takeuchi said. According to Tokyo Gas, the Asian LNG market is not tight, but oil-linked import prices are high. In contrast, domestic markets in the region are regulated and prices remain low, which means buyers in Asia, Taiwan or South Korea cannot afford to take expensive gas, Takeuchi added.
Shigeki Sakamoto, chief researcher of Asia Pacific/global LNG at state-owned Japan Oil, Gas & Metals National Corporation, said new forecasts for Japan's LNG demand were being prepared in the wake of the disaster, but additional demand was estimated to be about 15 million mt/year.
