Japan winter demand for oil for power generation to fall 10-20 pct -PAJ

TOKYO, Sept 19 Thu Sep 19, 2013 4:34am EDT

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TOKYO, Sept 19 (Reuters) - Japanese demand for direct-burn crude and fuel oil for power generation is likely to fall 10 to 20 percent this winter from a year earlier as cheaper coal-fired energy output picks up, the head of the Petroleum Association of Japan (PAJ) said.

Reduced appetite from the world's third-biggest oil consumer could drag on prices that have risen more than 4 pct in the past three months.

Two new coal-fired power units built by Tokyo Electric Power Co in northern Japan, with a combined capacity of 1,600 megawatts, account for the bulk of the country's upturn in coal-fired energy production.

Yasushi Kimura, who is also chairman of Japan's biggest refiner JX Holdings, told reporters on Thursday that oil demand would also depend on when nuclear plants resume output amid public anxiety in the wake of the disaster at Tokyo Electric's Fukushima Daiichi plant.

Demand for crude and fuel oil for power generation averaged 625,000 barrels per day (8.942 million kilolitres) in December 2012-February 2013, down 2.5 percent from a year earlier, according to Reuters calculations based on data provided by PAJ.

Japan's coal imports are set to hit another record over the next year as utilities burn more of the cheaper fuel following the Fukushima crisis.

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