This is due to stronger shift of investment to nuclear and renewables, among others.
Japan's LNG imports are set to decline at an average rate of 1.1% over the next 10-years, due to macroeconomic and demographic headwinds, growing investment into nuclear and renewables energy, and liberalisation of the domestic electricity retail market, which would drive utilities towards lower-cost power options, such as coal, according to BMI Research.
Japan's LNG imports hit 8.3mn metric tonnes in January 2017, an increase of 14.6% on year and a 13-month high, as cold winter temperatures drove stronger demand for heating nationwide.
Here's more from BMI Research:
Government statistics show that gas consumption grew comparably across all sectors in the month, with the industrial and household sectors registering particularly strong y-o-y growth of 6.3% and 5.6%, respectively.
However, the rolling off of peak demand season in the next few months should see import levels decline moderately over the February-March period. We expect imports thereafter to see a slight rebound, as contracted off-take from Australian projects resume, following minor disruptions in Q416.
In H217, the anticipated start-up of three new liquefaction projects in Australia (Wheatstone, Ichthys and Prelude FLNG) that have long-term purchase agreements in place with Japanese buyers will provide support to imports. Meanwhile, spot LNG prices for Japan remain at the highest level since February 2015.
However, such cargoes constitute a relatively small percentage of Japan's large LNG demand, which is primarily met via long-term contracts.
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