Norwegian LNG Cargo Heads for Japan

Japan will import liquefied natural gas from Norway for the first time since 2008, with the Arctic Discoverer tanker expected to arrive at the Oita LNG terminal in southwestern Japan on Sept. 10, an industry source familiar with the matter said on Thursday.

The spot 140,000-cubic-metre tanker loaded with Statoil’s Snohvit LNG departed from Hammerfest port in northern Norway, the source said.

Japan’s LNG imports have been rising at a record pace this year as utilities ramped up gas-fired power generation to offset a near-record low in nuclear plant utilisation after the atomic disaster in Fukushima following a March quake and tsunami.

Spot LNG prices in the Pacific have risen over 50 percent since March to more than $15 per million British thermal units (mmBtu), largely due to the increase in Japanese demand.LNG-AS

The tanker is currently travelling off of Singapore, according to AIS live ship tracking data on Reuters.

Kyushu Electric Power Co , which runs the sole LNG terminal in Oita via its 98 percent-owned venture with Oita Gas, said it was in talks to buy the Norwegian LNG. It would be Kyushu Electric’s first purchase of Norwegian LNG.

Kyushu has been procuring more oil and LNG to boost non-nuclear power output as worries about atomic safety have kept utilities from restarting reactors after the radiation crisis at the Fukushima Daiichi plant north of Tokyo.

Tokyo Gas imported 60,750 tonnes of Norwegian LNG for the first time in March 2008 and another 61,910 tonnes in September that year, Ministry of Finance data shows. There have been no Norwegian imports since then.

Some of the LNG imported at the Oita terminal is used at Kyushu Electric’s biggest fossil-fuel plant, the gas-fired Shin-Oita power plant, which has a total capacity of 2,295 megawatts.

JAPAN’S IMPORTS SET TO RISE 12 PCT IN 2011

In January-June, Japan imported a record 37.569 million tonnes of LNG, up 8.3 percent from a year ago.

Imports this year are set to jump 12.2 percent to 78.6 million tonnes, as Japan replaces nuclear power after the March earthquake, and to 81.6 million tonnes in 2012, a Reuters poll of analysts showed.

The supply tightness caused by growing Japanese demand has already attracted some Atlantic Basin supply to Asia, where LNG is sold at a significant premium and industry analysts say the trend is likely to continue.

In coming years, analysts say European utilities may face difficulty securing supplies and new European import terminals may be left to idle as producers ship gas cargoes east to fetch higher prices.

Japan’s LNG imports totalled 6.407 million tonnes last month, up 14.3 percent on year, their fourth-highest level and marking a record high for the summer season.

(reuters)