Japan Seeks to Stabilize LNG Supplies Through International Relations

---

Researched by Industrial Info Resources East Asia (Kofu-shi, Japan)--Since the March 11 earthquake, tsunami and ensuing nuclear situation, public approval of nuclear energy has dropped dramatically. As a result, more than 80% of Japan's nuclear capacity is offline due to both the earthquake and scheduled maintenances. Though this loss of capacity led to the threat of rolling blackouts during the summer months, Japan was largely spared due to unseasonably cool weather, emergency installation of diesel generators and gas turbines at several existing plants and increased operating levels at thermal power plants throughout the country. To compensate for this loss in capacity, liquefied natural gas (LNG) has taken the lead as the primary energy source of choice.

Japan is the world's largest importer of LNG with about 40 receiving terminals spread throughout the country and more under construction. With demand for LNG increasing as the winter peak season looms in the near future, Japan has begun to approach its LNG source nations in order to stabilize its supply. The Japanese Minister of Economy, Trade and Industry, Yukio Edano, has had meetings with heads of state from Indonesia as well as Qatar where the topics addressed focused on stabilizing Japan's supply of LNG.

Indonesia's exports of LNG have been declining in recent years due to increased domestic demand in Indonesia owing to urbanization and increasing power coverage. However, following a visit from Edano, Indonesia announced that it intends to increase its exports to Japan. Likewise, Russia has also capitalized on the increased demand for LNG in Japan and has increased its exports. Since March 11, Russia has increased shipments to Japan from its only LNG plant, Sakhalin-II, by roughly 325,000 tons of LNG.

Chubu Electric Power Company Incorporated (TYO: 9502) (Chuden) (Nagoya, Japan) is set to receive its first shipment of LNG from Indonesia at INPEX Corporation's (TYO: 1605) (Tokyo) Naoetsu LNG receiving terminal on October 8. This initial shipment will give Chuden 150,000 kiloliters of LNG, intended for use as fuel at its under-construction Jouetsu Power Plant in Niigata, Japan, roughly 140 miles north of Tokyo. Chuden also owns two LNG terminals of its own in Chita and Mie, in central Japan, roughly 160 miles southwest of Tokyo.

View Plant Profile: 1065398 3015470 3014533 Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.