Japan LNG imports to drop to 62mtpa by 2030 - METI

Source: Heren

2015/09/16

Japan, the world’s largest LNG buyer, will see imports fall to 62mtpa by 2030 as gains in fuel efficiency and the greater use of coal and renewable energy whittle down gas demand, the country’s energy minister said on 16 September.

The drop in LNG demand would put gas at 27% of Japan’s total fuel mix, down from 40% currently, and on a par with levels last recorded before the March 2011 disaster at Tokyo Electric’s (TEPCO) Fukushima Daiichi nuclear plant put the country on the path to greater LNG dependence.

Japan is not the only place where LNG demand is declining, at least in the short term. Major producers are in danger of losing market share around the globe to coal and renewable energy despite currently low prices for gas, said International Energy Agency Executive Director Fatih Birol.

The availability of cheap coal has contributed to a move away from LNG for utilities in Japan, South Korea and elsewhere despite downward price pressure for most of the past year.

“The oil and gas industry assumed Asian consumers would take any amount of LNG at any price. This assumption was a mistake,” Birol said during a presentation at the LNG Producer-Consumer Conference in Tokyo. “Today, in key regions in Asia, what we see is gas is losing market share and coal is gaining market share. Even major gas producers like Malaysia have decided that using coal at home and exporting gas makes more sense.”

Renewable energy is also gaining wider acceptance and starting to prove a long-term challenge to LNG consumption, Birol said, pointing to the solar power industry in India as an example. ben.lefebvre@icis.com