There has been an increase in liquefied natural gas (LNG) imports into Japan this week in the wake of the devastating earthquake and ensuing tsunami that hit the country last week and shut down a great deal of its energy infrastructure and operations, most notably a number of nuclear power plants.
Japanese utilities are expected to increase their LNG imports by 1.5 million tons in April to make up for the loss of power generation from nuclear and thermal power plants.
According to a report from Reuters, South Korean officials said that they will be shipping LNG supplies to utilities in Japan on a swap basis with state-run Korea Gas Corp., negotiating agreements with LNG sellers to expedite the process.
“To help Japan recover from the quake, we decided to supply some LNG from import volumes for late March through April, as long as it does not disrupt local supply,” South Korean officials said in a statement. This swap agreement is unlikely to disrupt South Korean supplies since the country has already secured 98% of its LNG for the year through short-term and long-term contracts.
Russia shipped 19,500 cubic meters of LNG to Japan during the weekend and agreed to ship an additional 100,000 cubic meters of LNG this week, according to the Russian news agency Itar-Tass.
In addition, Qatar announced in a statement that it was ready to meet Japan’s LNG needs through its two state-controlled companies, Qatargas and Rasgas.
"Qatargas stands ready to provide all the support to its long-term partners and foundation customers in Japan to meet any increased requirements for LNG at this time,” Qatargas said in a statement. “Qatargas can also rely on our sister company RasGas to support Qatargas' efforts to meet our Japanese buyers and partners needs.”
Officials with Royal Dutch Shell also announced they intended to divert shipments of LNG to Japan to meet demand in the country for its power needs.
While many market analysts anticipated that demand for oil in Japan will drop and have a negative effect on global crude prices, it is expected that global LNG as well as natural gas prices related to the Pacific market will increase in the next few weeks.
Officials from Tokyo Electric Power Co. announced that all four of its LNG import terminals were operating normally and were not affected by the earthquake or tsunami. – Frank Nieto
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