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Japanese LNG imports predicted to drop

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LNG Industry,

Japan’s LNG imports will decline for two years in a row in fiscal 2017, which started on 1 April, and fiscal 2018 as more nuclear reactors come back online.

The country’s LNG purchases inched up 1.4% year on year in fiscal 2016 to 84.7 million t, though their value tumbled 26.6% on the year to US$30.08 billion.

But import volumes are set shrink 3.1% to 82.1 million t in fiscal 2017 and then by 2.3% to 80.3 million t in fiscal 2018.

The estimates are based on the assumption that the Japanese economy, as measured by real GDP, will grow by 1.4% in fiscal 2017 and 1.1% in fiscal 2018, while five more nuclear reactors will come online by the end of fiscal 2018.

In that base-case scenario, Japanese nuclear power generation will rise from 18.1 billion kWh in fiscal 2016 to 55.6 billion kWh in fiscal 2017 and 65.6 billion kWh in fiscal 2018.

Resource-poor Japan imports almost all of its natural gas in the form of LNG and is the world’s largest buyer of the frozen fuel. LNG demand has risen sharply in Japan as an alternative fuel to atomic power in the wake of the 2011 Fukushima nuclear disaster.

Before the nuclear disaster, Japan had more than 50 nuclear reactors in operation supplying about 30% of the country’s electricity needs. There are currently about 40 usable nuclear reactors in Japan, but most of them remain idle because of safety concerns.

Japanese power companies have significantly boosted generation at thermal power plants (TPPs), especially LNG-fired ones, to make up for lost NPP output.

Japan’s LNG imports surged from 70.6 million t in fiscal 2010 to 87.7 million t in fiscal 2013 and 89.1 million t in fiscal 2014 before dropping to 83.6 million t in fiscal 2015.

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