UPDATE 2-Japan LNG imports hit record as nuclear use dwindles
* Jan crude imports fall 2.1 pct from yr earlier
* Jan thermal coal imports rise 7.9 pct from yr ago
* Govt asks utilities to mull ways to save peak-hour demand (Recasts, adds details on power demand)
TOKYO, Feb 20 (Reuters) - Japan's imports of liquefied natural gas (LNG) soared to a record high in January mainly to fuel electricity generation, helping make up for dwindling use of nuclear power due to the Fukushima radiation crisis.
But imports of comparatively more expensive crude oil by Japan, the world's biggest LNG importer and the third-biggest oil user, fell 2.1 percent from a year earlier, down for the third month in a row, government data showed on Monday.
The volume of customs-cleared LNG imports rose 28.2 percent from a year earlier. The LNG imports, mainly from Qatar and Malaysia, totalled 8.15 million tonnes in January, exceeding the previous record of 7.545 million tonnes set last August.
The country's 10 regional electricity utilities consumed a record amount of gas for power generation in January, industry data has shown. Apart from electricity utilities, city gas suppliers also import LNG.
Japan's imports of thermal coal for power generation rose 7.9 percent from a year earlier to 10.03 million tonnes, preliminary data from the Ministry of Finance also showed.
In contrast, Japan imported 18.83 million kilolitres (3.82 million barrels per day) of crude oil last month, down 2.1 percent from a year earlier, the data showed.
That compared with 19.84 million kl imported in December.
More details, including crude suppliers, will be available when the Ministry of Finance announces final data on Feb. 27.
Meanwhile Japan is seeking an exemption from U.S. sanctions on Iran over Tehran's nuclear programme, and most Japanese refiners have yet to decide annual term contracts with Iran for this year, although they have been reducing buying from the world's fifth-largest crude exporter for the past few years.
Japan's oil demand has been in a downtrend for more than 10 years as the population ages, fuel efficiency improves and energy sources diversify from costly oil to cleaner fuels such as gas.
By the end of January, only three of Japan's 54 nuclear reactors were in operation amid safety concerns after the March earthquake and tsunami triggered a radiation crisis at Tokyo Electric Power Co's Fukushima Daiichi nuclear plant, leading to widespread contamination and mass evacuations.
Since then no reactors shut for regular maintenance have restarted as they need to meet new safety checks and receive clearance from both the central and local governments.
Without such approval, all Japan's reactors could be shut by the end of April.
The prospect of being without nuclear power has raised fears of forced power rationing and temporary blackouts in the summer, when air conditioning puts extra strains on supply.
But Trade Minister Yukio Edano has said safety takes precedence over reactor restarts and that even if all the reactors are shut there is a good chance the nation can cope without forcing mandatory cuts on large users of the kind that were imposed last summer.
The government is considering how to avoid power shortages in the summer, when it estimates the nationwide power supply could fall 7 percent below demand if no reactors are online.
Since it is difficult to raise overall supply capacity drastically in the coming months, the government is asking power utilities to come up with a variety of pricing incentives to encourage large users to reduce peak-hour demand, a trade ministry official said. (Reporting by Risa Maeda; Editing by Michael Watson)