TEPCO's Fossil Fuel Usage Sets Records, Qatar Helps Stabilize LNG Supply

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Researched by Industrial Info Resources (Sugar Land, Texas)--Since its earthquake and tsunami disaster on March 11, 2011, Japanese power companies, especially Tokyo Electric Power Company (TYO:9501) (TEPCO) (Tokyo), have had to increase their reliance on fossil-fuel energy. Japan is already the largest importer of liquefied natural gas (LNG) in the world, but with so much of its energy make-up unavailable, the demand for LNG has driven up consumption rates to record levels. As a result, the Japanese government and private companies have sought to secure supplies from producer nations. In addition, older, mothballed fossil-fuel power plants were restarted to help compensate for lost capacity, causing increases in those consumption figures as well.

In 2011, TEPCO used 17.6% more LNG than 2010, totaling 22.88 million metric tons for the year. Prior to 2011, the record high for LNG consumption at TEPCO was in 2007, with 19.87 million metric tons. Last year also saw a huge rise of 78.2%, up to 5.56 million kiloliters of fuel oil consumption compared to the previous year. This rise can be attributed in large part to the fact that many older Japanese power plants that had been previously mothballed and restarted last year use fuel oil as their primary fuel source. Crude oil and coal also saw increases in consumption rates of 54% (2.51 million kiloliters) and 6.6% (3.22 metric tons), respectively.

Looking at projections for next year, TEPCO's fossil fuel bill looks to grow even more with LNG consumption expected to hit 23.27 million metric tons. With this reality in mind, efforts to secure LNG sources from partner nations began in October 2011. For more information on Japan's LNG imports see IIR's October 5, 2011 article Japan Seeks to Stabilize LNG Supplies Through International Relations. On June 11, TEPCO capitalized on the goodwill engendered on Minister of Economy, Trade, and Industry, Yukio Edano's talks with Qatar's head of state. TEPCO has secured a 1 million metric ton per year contract with Qatar Liquefied Natural Gas Company (Doha, Qatar) (Qatargas), owned by the state's Qatar Petroleum (Doha, Qatar). This contract is valid from August of this year through December 2021.

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