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Japan LNG imports fall as nuclear plants restart

Tuesday, 5 March 2019

Imports of liquefied natural gas for Japan's electric power sector are likely to decrease by up to 10% in 2019 following the return to service last year of five nuclear reactors, the US Energy Information Administration said yesterday.

Japan LNG imports fall as nuclear plants restart — (Image: EIA, based on International Energy Agency data)

Prior to 2011, nuclear power provided about 30% of Japan's electricity generation. However, following the Fukushima accident all of the country's nuclear reactors were taken out of service for mandatory safety inspections and upgrades. Reactors entering scheduled maintenance and refuelling outages remained offline, meaning Japan had no nuclear generation at all between September 2013 and August 2015. Much of the shortfall has in the meantime been met with increased use of natural gas generation.

Five Japanese reactors - Genkai 3 and 4, Ohi 3 and 4, and Ikata 3 - returned to service during 2018, bringing to nine the total number of units in operation and with a total capacity of 8.7 GWe, the EIA said.

"As the five nuclear reactors were gradually restarted in 2018, they began to offset natural gas-fired generation and, as a result, LNG imports decreased as the reactors reached full operation," the Administration said.

In 2019 - which will be their first full year of operation - the EIA estimates the restarted nuclear reactors will further displace Japan's LNG imports by about 5 million tonnes, equivalent to 10% of Japan's power sector natural gas consumption and 6% of its LNG imports in 2018.

Japan's long-term energy policy calls for nuclear's share to reach 20-22% by 2030 which the EIA says would require up to 30 reactors to be in operation. In addition to the nine of Japan's 39 operable reactors that have already resumed operation, another 16 reactors have applied to restart.

All of Japan's natural gas demand is met with imported LNG, and it imports more than any other country, the EIA noted. Over a third - 34.7% - of its LNG imports comes from Australia, followed by Malaysia (13.4%) and Qatar (12.0%). Japanese natural gas generation has been declining since it peaked in 2014 and is likely to decline further this year as generation from nuclear increases, the EIA said. The outlook for further LNG imports will be largely dependent on the number of nuclear restarts, it said.