Page 8 - AsiaElec Week 39

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Japan’s LNG imports shrink 4.1% in August

JAPAN WHILE Japan’s liquefied natural gas (LNG) Japanese demand for LNG has been slowly
imports shrank by 4.1% year on year in August tapering off in the wake of the country’s restart
to 5.84mn tonnes, cheaper supplies of the fuel of nuclear power generation, with nine reac-
prevented a steeper decline. The country paid tors having been reactivated so far. The Japan
JPY190.9bn ($1.83bn) for its LNG deliveries last Atomic Energy Commission has called for more
month, which was 44% less than in August 2019. to be brought back online in order to reduce the
August volumes were also down 3.3% from country’s carbon emissions and stabilise power
the 6.04mn tonnes imported in July. supplies.
Deliveries in the first eight months of the year The situation, coupled with tighter maritime
amounted to 48.2mn tonnes, around JPY2.3 tril- emission rules, has encouraged Japanese ship-
lion ($22.01bn). While industrial gas demand ping companies to speed up development of
remains subdued in the wake of the coronavi- LNG bunker options.
rus (COVID-19) pandemic, demand from the Kawasaki Kisen Kaisha (K-Line) named
power sector picked up as the economics of LNG Japan’s first LNG bunkering vessel last week
over coal-fired generation improved. at Kawasaki Heavy Industries’ (KHI) Sakaide
Japanese thermal coal shipments contracted Works. Central LNG Marine Fuel Japan will use
by 12% y/y in August to 7.9mn tonnes, according the vessel, christened Kaguya on September 16,
to provisional Finance Ministry data. The uptick to begin supplying LNG to ships in the Chubu
in last month’s power demand, owing to a sum- region before the end of the year, K-Line said on
mer heat wave, is not expected to translate into September 18.
lasting support for LNG purchases, however. Kaguya’s first supply operations will involve
Japanese power and gas utilities’ high com- the NYK-operated pure car and truck carrier
mitment to long-term volumes is likely to stifle (PCTC) vessel Sakura Leader, which is the first
buyer interest for additional volumes even if win- large PCTC to be fuelled by LNG. The bunker-
ter temperatures are colder than expected, Platts ing vessel will also supply a new car carrier that
quoted unnamed market sources as saying in late K-Line is set to deliver before the end of March
August. 2021.™

Australian prices to rise if Narrabri

gas fields approved

AUSTRALIA AUSTRALIAN power and gas prices could rise the cost of gas. It simply doesn’t make sense.”
if Santos’ Narrabri gas fields are approved, as the Robertson argues that Narrabri gas will cost
gas must travel huge distances to reach custom- $6.40 a gigajoule at the well head plus $2.10 a
ers and generating facilities on the coast. gigajoule for transmission to Sydney.
The proposed Narrabri gas fields are une- “Consumers will be paying for new pipelines
conomic, Bruce Robertson, gas/LNG financial in addition to the cost of production at the fields,”
analyst at the Institute for Energy Economics says Robertson. “This deal is a financial red flag,
and Financial Analysis (IEEFA), said in a sub- to both electricity consumers and taxpayers who
mission to the Independent Planning Commis- will wear the cost of expensive gas infrastructure
sion (IPC) in New South Wales. investment under the Federal government’s
With the IPC due to publish a decision on planned subsidies to the industry.
Narrabri by 30 September, 2020, Robertson said “The gas industry has been suffering write-
Santos could not supply gas to Sydney and make down after write-down, even before the pan-
a profit from the proposed Narrabri gas fields. demic hit. They are sinking hand over fist, yet the
“Even the gas industry is saying they can’t government is intent on throwing public money
deliver gas at the government’s desired $4 a giga- to an industry that itself says it can’t deliver cheap
joule, which is the only way gas, and therefore gas to Australian consumers.”
electricity prices, will drop,” says Robertson. Robertson concludes Narrabri’s high-cost gas
“Narrabri gas will be high-cost gas to produce will force up prices for domestic consumers.
at $8.50 a gigajoule, meaning gas consumers are “While we pay even more for gas, which
likely to see higher, not lower gas prices if the forces up the cost of electricity, the govern-
fields are approved. ment-subsidised gas companies will continue to
“You can’t produce high-cost gas and lower export our lower-cost sources of gas.™

P8 www. NEWSBASE .com Week 39 30•September•2020