Japan's top shipping companies are set to place orders for roughly 90 new liquefied natural gas (LNG) tankers by 2020, with a total value of 1.8 trillion yen ($17.61 billion).
It is well known that following the Fukushima disaster in 2011 the Japanese people lost all faith in nuclear power and revolted against the industry. This led to Japan becoming completely nuclear in September 2013, for only the third time in over forty years, and with no firm plan for restarting the nuclear reactors the country has had to look to other sources of energy to make up for the 30% of total generation capacity that nuclear used to provide.
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LNG was one of the energy sources that filled a large share of the gap left by nuclear power, and along the increased demand from China, which is trying to cut back on its coal consumption, and South Korea, Japanese shipping companies clearly want to prepare for the expected boom in LNG demand in Asia. The amount of LNG traded globally is expected to increase to 400 million tonnes a year by 2020, up from 250 million tonnes last year.
Reuters explains that Nippon Yusen KK, the largest shipper in Japan, is set to increase its LNG tanker fleet to 100 from about 70; Mitsui OSK Lines Ltd., the second largest shipping company in the country, will increase its LNG fleet to 110 from a current size of 70; and Kawasaki Kisen Kaisha Ltd. plans to buy 20 new LNG tankers before 2020.
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Now these plans are not fixed, and may change depending on whether or not some of Japan's nuclear reactors will be restarted, which will obviously impact on the country's LNG demand.
Someone from the LNG tanker division on Mitsui OSK told Reuters that, "we will place an order only after we sign a long-term contract with our LNG customers who could be producers or buyers."
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More