Regional LNG: Japan's LNG imports 'could climb 50 percent by 2020'

Japanese companies will have to significantly increase imports of liquefied natural gas (LNG) in plans to boost the gas share of the nation's total energy balance by 2020, according to Lloyd's List.

The shipping daily said Tuesday that supplies of LNG to Japan could climb 50 percent over the next 17 years and also meaning 20 more liquefied gas carriers will be needed.

The estimate was based upon president of Japan's biggest gas distributor, Tokyo Gas, Hideharu Uehara, announcing that he expects natural gas market share to rise from around 13 percent of the total energy needs today to 20 percent by 2020.

"The significance of natural gas is increasing, as the fuel is less harmful to the environment than other kinds of energy such as oil," Uehara told the World Gas Conference in Tokyo this week. "That is why we plan to make additional gas purchase contracts," he said.

Lloyd's said that imports of LNG were expected to grow on a grand scale with new supplies coming from eastern Russia as well as more traditional areas, such as Indonesia.

It also quoted Keith Bainbridge of London-based LNG Shipping Solutions suggesting that Japan's increasing need for LNG could add significant shipping demand if the liquid gas is sourced from Middle East or southeast Asian suppliers.

The significance of the increase is underlined by Japan already importing 48 percent of the world's produced LNG, with 54.2m tons delivered in 2002.

Russia's Sakhalin regional Governor Igor Farkhutdinov, told Lloyd's that the province would compete with the Middle East as a major source of natural gas for customers in Japan, China, Taiwan and South Korea.

Andy Calitz, commercial director at Sakhalin Energy Investment, the joint venture investing 10 billion dollars in the second phase of development at Sakhalin II, said the Russian region was not seeking to displace the Middle East but were 'competing for the growth'.

Lord Browne, chief executive of UK oil major BP, told the Tokyo conference he expected imports of LNG in other Asian countries to rise strongly driven by population growth over the next 10 years.

"Seven hundred million people will be added to the world's population by 2010, 80 percent of that will be in Asia," he said, predicting that Asia in 10 years will consume the same amount of energy as North America. (*)