Japan is unlikely to start additional nuclear activity in 2013, sustaining record demand for liquefied natural gas (LNG), Wood Mackenzie, a global energy and mining research and consultancy group, said.
Japan used to depend on atomic power for about a third of its energy until the nuclear disaster at Fukushima plant occurred on March 11, 2011. Japan’s nuclear capacity will be just half of what it was before 2011, Nicholas Browne, a Singapore-based gas analyst for Wood Mackenzie, said.
The activity of most Japanese nuclear plants was idled due to safety checks after the nuclear accident at Fukushima, so Japan had to import a record 87.3 million metric tons of LNG in 2012 to make up for a power generation shortfall.
From a total of 54 reactors, only two are still operating now, while the rest of them are shut for safety checks.
“In terms of the nuclear ramp-up, we see a gradual process from the start of 2014 through to the end of the summer of 2015,” Browne said. “Some of the discussions we have had with Japanese companies suggest it could easily be a three-year process, where the government takes a rigorous approach and takes a long time to decide.”
Japan’s intake of LNG for 2013 will be similar to last year’s, when the country was left with no active nuclear plants for about two months due to safety checks at atomic power stations, according to Wood Mackenzie.
“We see the Japanese gas market as being a market of moderate growth,” Browne said. “There are some fundamentals to outweigh issues such as falling population and other topics which put a dampening effect on demand.”