Japan’s LNG, oil demand likely to remain strong
TOKYO JAPAN’s decision to restart two nuclear reactors idled for safety checks after the Fukushima catastrophe won’t cut the country’s spiraling fossil-fuel import bill unless more atomic units are brought back on line, traders and analysts said.
Japan’s fuel purchases soared as reactors were shut down and put through safety checks after the meltdowns at Fukushima in March 2011, dragging the world’s thirdbiggest economy into its first trade deficit in more than three decades.
The reactors at the Ohi plant operated by Kansai Electric Power Co each have a capacity of 1,180 megawatts and restarting them would reduce LNG usage by about 180,000 tonnes per month, according to Reuters calculations.
If the reactors are replacing oil-fired generation, Japan’s crude requirements would fall by about 70,000 bpd.
But with summer approaching, households and business turn on air conditioners and boost electricity consumption despite some energy saving efforts from last year and Kansai Electric is expected to keep fossil-fuel power plants online.
“It’s still not going to make a huge impact in reducing oil demand, which will rise in the next few months when power demand is higher,” Alex Yap, oil analyst at FACTS Global Energy said.
Japan’s demand for directburning crude and fuel oil may rise as much a 900,000 bpd without more reactors operating, up from a peak of 700,000 bpd in February, before the last unit shut down in May, he said.
“The restart of the nuclear plant will not affect demand that much,” said a fuel oil trader in Singapore. “Fuel oil demand will be cut if more reactors come on line though.” Prime Minister Yoshihiko Noda and three other ministers approved the startups at a meeting on Saturday in Tokyo. Noda has said the restarts are necessary to avoid damaging the world’s third-largest economy.