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43 the national bureau of asian research nbr special report #41 | september 2012 TOMOKO HOSOE is Director of FACTS Global Energy and a Project Specialist at the East-West Center in Honolulu. She can be reached at . Asia’s Post-Fukushima Market for Liquefied Natural Gas: A Special Focus on Japan Tomoko Hosoe EXECUTIVE SUMMARY This essay provides an outlook for liquefied natural gas (LNG) markets in Asia and argues that the Great East Japan Earthquake and subsequent tsunami on March 11, 2011, had a widespread effect not only on Japan’s energy situation but on long-term energy policy globally. MAIN ARGUMENT As a result of the disruption in nuclear-power generation, Japan’s demand for LNG, as well as for low-sulfur fuel oil and crude oil, for power generation increased significantly in 2011. LNG imports increased by 12% to 78.5 million tons, accounting for 32% of the global LNG trade. Imports will be even higher in 2012 as the country continues to face an unprecedented nuclear crisis. Japan, once considered a mature and saturated market, has become a renewed growing market and will remain the world’s biggest importer of LNG for the foreseeable future. POLICY IMPLICATIONS • Japan’s post-Fukushima energy policy will be the key driver shaping Japan’s LNG demand over the next decade or more. • Japan’s demand for fuel will generate concerns over energy security among other Asian LNG buyers for at least the next five to six years, until more supplies become available from greenfield projects, including those in Australia and North America. • Toward 2020, North American gas supplies, namely LNG from the United States, will play a key role in meeting Asia’s increasing LNG demand as a result of both the need for supply diversification and economic reasons. 45 ASIA’S POST-FUKUSHIMA MARKET FOR LNG u HOSOE J apan’s tragic triple disaster and its effects on the country’s fuel mix have contributed to changing the landscape of Asia’s liquefied natural gas (LNG) market. Japan, once considered a mature and saturated market, has become a renewed growing market and will remain the biggest importer of LNG for the foreseeable future. It seems inevitable that the implications of Japan’s fuel need will generate concerns over energy security among other Asian LNG buyers, especially for the next five to six years until more supplies become available from greenfield projects, including those in Australia and North America. This essay first examines the Asian LNG trade in a global context, followed by an analysis of Japan’s post-Fukushima LNG demand outlook and constraints for future imports. The essay then discusses supply outlook for 2020 with a special focus on the role of U.S. LNG. The Asia LNG Trade in a Global Context Global demand for LNG for 2000–2011 grew at an average annual growth rate (AAGR) of 8.2% to approximately 242 million tons (mmt).1 More than half the increase in demand for this period came from Asia in absolute terms. In 2011, Asia accounted for 64% of the global market share. Furthermore, Asia’s established markets—Japan, South Korea, and Taiwan—accounted for 58% of global market share (see Figure 1). 1 The data presented in this essay is drawn from the author’s research at FACTS Global Energy (FGE). f i g u r e 1 Historical global trade (imports and exports) of LNG, 2000–2011 s o u r c e : FACTS Global Energy. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 0 50 100 150 200 250 300 mmt Year Asia Europe Americas Middle East and Africa 72% 23% 5% 0% 60% 30% 9% 1% 71% 19% 9% 1% 2000 2010 2011 46 NBR SPECIAL REPORT u SEPTEMBER 2012 Asia’s LNG imports increased by more than 16% on the year to 154 mmt in 2011, of which the three established markets accounted for 83% of Asia’s total imports (see Figure 2). Japan’s imports grew by 12% year-on-year (YOY) to 78.5 mmt. South Korea and Taiwan continued to increase imports at 36.7 mmt (up 13% YOY) and 12 mmt (up 11% YOY), respectively. Imports from the two emerging markets—China and India—grew robustly in 2011 as well, to 12.2 mmt (up 30% YOY) and 13.5 mmt (52% YOY), respectively. China’s growth in demand was supported by strong demand from both the power and industrial sectors in...

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Additional Information

ISBN
9780981890463
MARC Record
OCLC
868216786
Pages
65
Launched on MUSE
2014-01-01
Language
English
Open Access
No
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