Japanese LNG Prices Strengthen

The average price of spot LNG imported into Japan that was contracted in October 2017 increased to $8.20/mn Btu, said the country's Ministry of Economy Trade and Industry (Meti) November 10.

LNG prices typically increase during the autumn into the winter, but this marks a sizeable increment from the $6.90/mn Btu recorded in September by Meti.

Comparable prices reported by Meti a year ago were $6.10/mn Btu for October and $5.70/mn Btu for September. Spot prices for northeast Asia are currently assessed higher than $9/mn Btu by price reporting agencies.

Japan’s Meti also reports official average arrivals-based price each month for spot LNG cargoes. The latest November 10 figures show these as $6.10/mn Btu for October and $5.80/mn Btu for September 2017 (compared to a year-ago level of $5.70/mn Btu in October 2016).

Reopening of Japanese nuclear plants, following the March 2011 Fukushima Daiichi tsunami disaster and resultant reactor meltdown, is occurring more slowly than some expected, maintaining demand for gas-fired generation and the call on LNG imports.

Of Japan’s 42 operable nuclear reactors with a combined capacity of 39.8 GW, only five have restarted, according to a briefing by the US Energy Information Administration published November 8. It said that Japan’s Nuclear Regulation Authority (NRA) has cleared four more reactors to restart which is expected to happen in 2018. NRA has also given preliminary approval for nine additional restart applications, with another 12 currently under review. The remaining 12 reactors are expected to be retired by 2040.

Nine months ago in February 2017, only two reactors had restarted with a third expected online shortly.

Mark Smedley