Japan LNG demand to spike 10pc amid loss of nuclear plants, says Santos CEO Knox
Release Date: 2011-04-07JAPANESE utilities will boost demand of liquefied natural gas by about 10 per cent in the coming years to fill a gap in their energy supply left by the closure of nuclear power plants, Santos chief executive David Knox said today.
Big Japanese LNG buyers are "approaching us and others, the sellers, to fill that gap" in their energy supply, Mr Knox told a panel discussion organised by The Australian, which was broadcast online earlier today.
The plants were damaged by a devastating earthquake and tsunami that struck on March 11 and, apart from losing the Fukushima Daiichi nuclear power plant in the wake of the disasters, Japan has shut two other nuclear facilities.
"And we would envisage that gap would go for a number of years, three or four years anyway. And effectively they're going to be asking for 10 per cent more LNG supply for the next few years," said Mr Knox, who leads Australia's third-largest oil and gas company.
Santos and partners including Total SA are building an LNG project in Queensland that is slated to ship its first cargo in early 2015. The project has already underpinned its full production capacity with Korean and Malaysian LNG buyers.
Santos is also a shareholder in the PNG LNG project in Papua New Guinea, operated by Exxon Mobil. That project has signed up Chinese and Japanese buyers and is mulling an expansion. It's due to ship its first cargo in early 2014.
The long-term impact of events in Japan could be very significant for the LNG industry if some nuclear power plants aren't built around the world, Mr Knox said.