TOKYO, Feb 12 (KUNA) -- As the amount of liquefied natural gas (LNG)
imported from Indonesia is expected to fall significantly from 2010, Japan,
the world's bigget importer of LNG, likely will be seriously affected, a
top-selling Japanese newspaper reported Tuesday.
Indonesia currently supplies 22 percent of LNG imported by Japan, but final
agreement on the reduction is expected to be reached between Indonesia's
state-run oil company Pertamina and six Japanese firms later this month, said
the Daily Yomiuri.
Indonesia has decided to reduce LNG exports to secure the gas for its own
use in the face of a worldwide shortage and the rising cost of energy
resources. Indonesia has raised the margin of the reduction from its original
plan to halve its supply. Consequently, Japan is likely to see a shortfall of
about 9 million-10 million tons, the daily said.
Japanese companies will deal with the problem by increasing imports from
Australia and other suppliers with which they have already concluded
contracts, according to the paper. However, LNG development projects are
slowing down worldwide due to the difficulty of turning a profit from the
product due to the associated cost of building LNG plants.
In the Sakhalin-2 oil and gas development project off Sakhalin, Russia, LNG
supplies destined for Japan will be delayed from the originally scheduled
2008, to spring 2009. It was also planned to import 4.2 million tons of LNG
annually from Gorgon, Australia, starting in 2010, but this also is likely to
be delayed until 2012 or later.
Meanwhile, Qatar is notorious for its aggressive business approach and spot
LNG prices are heavily affected by day-to-day market fluctuations, thus
increasing the likelihood of significantly higher procurement costs, the paper
Japan currently has about 100 power plants that use LNG as fuel. Because
LNG has a high burning efficiency and emits little carbon dioxide, demand for
the gas is expected to increase. In addition to China, India and other rising
economies, the US and European countries, which have been importing gas
through pipelines, are also increasing LNG imports. (end)
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