Japan Prepares for More LNG While Pushing Nuclear Restarts, Safety

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Researched by Industrial Info Resources (Sugar Land, Texas)--Since the meltdown at the Fukushima Daiichi nuclear power station, owned and operated by Tokyo Electric Power Company (TYO:9501) (TEPCO), following the earthquake on March 11, 2011, Japan has shut down its entire nuclear fleet and increased its consumption of natural gas to compensate for the lost power generation capacity. This increase in consumption has led to increased imports of liquefied natural gas (LNG) and great efforts spent securing new sources over the next decade. All the while, Japan's power companies are trying to justify restarting their cheaper-to-operate nuclear reactors to the national government.

In the past two years, Japanese power, gas and investment companies have been busy securing new and reinforcing old supply lines of natural gas. Chubu Electric Power Company Incorporated (TYO:9502) (Chuden) (Nagoya, Japan) has been in the news as one of the Japanese companies to sign supply agreements with Freeport LNG Expansion LP (Freeport LNG), a partnership under the management of ConocoPhillips Company (NYSE:COP) (Houston), which is constructing an LNG export facility that is expected to be in service by 2018. Chuden recently announced that to ensure a flexible supply chain, it plans to increase its number of free-on-board agreements and secure eight dedicated tankers in time for Freeport's first shipment.

With ever-increasing levels of contaminated water and heightened concern over radiation associated with the meltdowns at Fukushima Daiichi, it is counter-intuitive that anyone but the power companies in Japan would want more active nuclear capacity. However, in the northernmost island in the archipelago, Hokkaido, businesses are putting pressure on the local governments to get the area's nuclear capacity back online by winter. Business leaders in Hokkaido say that it is very difficult to reduce power consumption during the island's frigid winters. Local business leaders also have met with Hokkaido Electric Power Company Incorporated (TYO:9509) (Sapporo, Japan) (HEPCO) officials and expressed their views, urging HEPCO to restart its Tomari Nuclear Power Station as soon as possible.

In western Japan, the Fukui prefecture's government has met with the International Atomic Energy Agency (IAEA) regarding the development of a nuclear and radiation safety-conscious workforce in the prefecture. Representatives from the Fukui Prefectural Government and the IAEA signed memoranda to this purpose on September 7. This is the first time that IAEA has signed such a document with a local governing body; it is part of Fukui Prefecture's "Energy R&D Hub Development Program," which aims to make greater use of the prefecture's abundant nuclear reactors as the center of a larger nuclear workforce and general energy R&D development initiative.

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