Russia to lose Japanese LNG market?
Russian companies, which consider Japan as a perspective gas sales market, are likely to have to update their plans. This country that buys a third of the world's volume of LNG, may significantly decrease the demand after the resumption of the work of atomic power plants, stopped in 2011 after the accident in Fukushima-1. In June, only 2 blocks of 50 were launched, but LNG purchases in Japan have fallen by 3% already; the restart of ten more reactor tanks will be discussed in Tokyo in September. If the solution is positive, the fall of LNG demand may be up to 10% on the results of the year, Kommersant writes.
According to the Japanese Ministry of Finance, in June the LNG import decreased by 3.1% as compared with the same period of 2012 to 6.44 million tons. Last month, the oil import into the country fell by 7.9% to 93.63 million barrels. The main reason of this is resumption of work of two reactor tanks in atomic power station Ooi in the middle of June. They and 48 more energy blocks were stopped after the accident at the atomic power station Fukushima-1 in March of 2011. Before this accident atomic power stations provided up to 30% of Japanese energy needs.
Taking into account policy of the new Japanese Government, headed by Shinzo Abe, we can expect the further resumption of work of atomic power stations. Thus, the Japanese Minister of Trade Toshimitsu Motegi said in spring that the Government intended to review the plan of the previous administration on the renunciation of atomic energy by 2030. In June, after final inspections, the third and the fourth blocks in the atomic power station Ooi were launched. And from July 1, new standards of safety of atomic power stations work, which takes into account the experience of the accident at Fukushima-1, came into force. At the beginning of July, four energy companies filed applications to the Atomic Energy Control Committee to resume the work of some of their atomic power stations. On the whole, 10 reactor tanks at five stations may be launched, but the Government will make the final decision in September.
If these atomic power stations are launched, the gas demand may decrease almost by 10% during the year, Grygory Birg of Investcafe considers. He notes that in 2011 after the accident the LNG demand grew by 12% as compared with the year before, in 2012 Japan imported about 85 million tons of LNG and in 2013-2014 the demand should increase by 2-4% per year, if the policy doesn’t change, the analyst thinks. But, Birg says, in case of return to the atomic energy use, the gas demand may be only about 75 million tons of LNG by 2035.
At the same time, Rosneft and Gazprom announce their plans to construct new facilities for LNG production in the Far East, and Japan is considered to be one of the target sale markets. In the case of the implementation of all the projects by 2020 Russia will be able to export roughly 45-50 million tons of LNG. Birg says that even if Japan returns to atomic power stations, the demand for Russian gas will be maintained because of its close proximity, but LNG will compete with raw materials of other producers. By the time, according to calculations of the Energy Centre of the Business School of Skolkovo, industrial LNG capacities in the world will double to 580 million tons (the maximum growth by 53 million tons is supposed to be in 2015 and 2017). This will lead to a decrease of the prices (today LNG in Japan is the most expensive in the world – on the average, it is about $650 per 1 thousand cubic meters). Thierry Brault of Societe Generale believes that if Japan wants to influence price formation at LNG markets, it must launch some atomic power stations. He considers that this year supplies in the world should be at the level of 2012, but the demand in Latin America is growing stronger than in Asia.
http://energo-news.ru/archives/111368
Translated by Svetlana Kyrzhaly
