UPDATE 1-Japan LNG imports may rise 10 pct in 2012/13

Thu Jun 7, 2012 12:18am EDT

Related Topics

* Japan LNG imports up sharply since Fukushima disaster

* All Japan nuclear reactors offline, restarts uncertain (Adds quotes, background)

By Charlie Zhu

KUALA LUMPUR, June 7 (Reuters) - Japan will need to import as much as 90 million tonnes of LNG this fiscal year, up nearly 10 percent from 2011, to generate the power needed to compensate for shut nuclear reactors, the chairman of the Japan Gas Association said on Thursday.

The world's largest importer of liquefied natural gas has relied heavily on LNG after the March 2011 tsunami wrecked the Fukushima nuclear plant, shattered public confidence in atomic safety and led to the shutdown of all of the country's reactors. Japan's heavy buying has driven up Asian gas prices.

"If all the nuclear plants continue to be shut down ... it will mean 85 million to 90 million tonnes," said Mitsunori Torihara, chairman of the Japan Gas Association, in comments translated from Japanese at an industry event in Malaysia.

"At the moment I have to say we are quite uncertain how many nuclear power plants will be able to be restarted."

That import level would be up from imports of 82 million tonnes in the fiscal year ending March 2012, and from 70 million tonnes before the Fukushima disaster, he said.

Nuclear power supplied nearly 30 percent of Japan's electricity needs prior to the tsunami. The government is pushing for restarts but the process has been slow as Tokyo struggles to win public support.

The country may struggle with imports above 85 million tonnes per year due to infrastructure capacity constraints, Reuters reported last month.

Japanese trading houses have bought stakes in gas projects worldwide and utilities have locked in long-term contracts from international gas suppliers as they anticipate LNG will play a bigger role in the country's future energy mix even if reactors restart.

South Korea, the world's second-largest importer, is also searching out gas projects for investment as it looks to secure future supply, Kangsoo Choo, chief executive of state-run Korea Gas Corporation (KOGAS) told reporters at the same event. It already has stakes in projects in Mozambique and Iraq.

The company said last month it plans to invest $2.5 billion in overseas oil and gas projects in 2012, 50 percent more than a year ago.

Other fast-growing Asian economies are competing for the supplies. India's gas importer GAIL plans to spend around $1 billion on shale gas assets in North America and has signed up to buy 3.5 million tonnes a year for 20 years from 2017. (Reporting by Charlie Zhu and Rebekah Kebede; Writing by Simon Webb; Editing by Chris Gallagher)

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