TOKYO: Kansai Electric Power Co has bought liquefied natural gas from Norway for the first time, a source said, a likely expensive purchase that illustrates the lengths Japan's troubled utilities must go to in order to obtain supplies.
Following the nuclear power disaster at Fukushima, Japan's LNG imports have risen at a record pace as utilities ramp up gas-fired power generation. Some 80 percent of reactors are now off-line as public safety concerns have delayed restarts after checks for maintenance.
A cargo of Statoil's Snohvit LNG from Norway will arrive at the western Japan port of Himeji around Saturday, an industry source familiar with the matter said.
It is only the fourth time that Japan has imported LNG from Norway.
"They could have paid as much as $19 (per million British thermal unit)," a Tokyo-based LNG trader said. "We expect the price to rise to around $20 in the peak winter season."
Market sources have estimated Asian LNG prices for November at $17.5 and European LNG prices at $14.
Kansai Electric, which prior to the disaster got half of its annual power output from its nuclear plants, had a harder time than some other utilities in meeting peak summer demand.
It burned an additional 1 million tonnes of LNG in June-September than originally planned. It currently has only four of its 11 reactors producing electricity.
Kansai Electric's president last month said it may have to ask customers to conserve power again this winter.
Japan's LNG imports are set to jump 12.2 percent to 78.6 million tonnes this year and to 81.6 million tonnes in 2012, a Reuters poll of analysts showed.
Tokyo Gas and Tokyo Electric Power bought Norwegian LNG for the first time in 2008, followed by Kyushu Electric Power in September this year.
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