Wednesday February 20, 2008

Japan faces Indonesian gas cuts

english.ohmynews.com :

In 2006, Japan purchased 62.2 million tons of LNG from abroad, up 7.2% from 2005. Indonesia was the largest supplier to Japan in 2006, exporting 13.99 million tons, followed by Australia, Malaysia, Qatar, Brunei and the United Arab Emirates. But Japan is increasingly alarmed by the global rush, led by China and India, as well as soaring prices, for natural gas - an environmentally friendlier fuel than oil.

Most of Indonesia's long-term LNG supply contracts with East Asian countries, including Japan, start expiring from 2010. Indonesia has threatened to make a draconian cut in its Japan-bound LNG exports to boost the availability of fuel for domestic industries amid decreasing natural gas, as well as oil, production at home.

Indonesia has said that although it will extend its LNG export contract with Japan after the current one expires in 2010-2011, the export volume will be drastically cut. Japan's reliance on Indonesia for LNG imports declined to about 22.5% in 2006 from nearly 40% a decade ago and will certainly drop further. But if a country that is geographically proximal to Japan like Indonesia drops out of the ranks of major suppliers, Japan's energy security could suffer in the long term.

- Japan is one of the world's leading users of nuclear energy (30% nuclear) as well as one of the few countries capable of reprocessing nuclear waste and extracting further energy from it via MOX fuel. They should be fine as long as they try not to site their nuclear power plants on top of earthquake fault lines.

See also :

1. Indonesia to cut LNG supply to 6 million tons after 2010
2. Indonesia's LNG supremacy wanes as Chevron's fields run short
3. Betting billions on liquefied natural gas
4. Indonesian firms to build LNG terminal (and why Singapore should go nuclear)

(2008-02-20 13:14:22 SGT) [Energy] Permalink

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