Japan to Quit Energy Reliance on Qatari LNG


ISLAMABAD: Japan’s impending decision to quit the usage of the costly liquefied natural gas (LNG) from Qatar will cause a severe downturn in global demand, which will result in massive reduction in price and provide Pakistan the best opportunity to negotiate the best affordable deal with the Qatari authorities, says a monthly journal of Argus, Global LNG.

Japan became the main importer of LNG in the world as it currently imports 4.193 trillion per annum.

The country known as the Land of the Rising Sun started importing LNG to cater to its energy needs after the Fukushima nuclear disaster in March 2001.

In the wake of the ballooning fuel cost because of costly import of LNG from Qatar at around $16 to $17 per MMBTU after abandoning the nuclear energy, Japan has decided to reverse its energy policy and decided to use the nuclear power again to run the wheels of its export-oriented economy but after ensuring safety measures, according to the journal.

The post-Fukushima shutdown of nuclear reactors has added fuel costs of $35 billion for the year 2013-14, ending March 31, with utilities forced to maintain their increased use of replacement thermal fuels such as LNG, oil and coal to make up for the lost nuclear output, it said.

Arshad H Abbasi, an energy expert, currently associated with a local-think tank, SDPI, said the landed cost of LNG from Qatar to Japan hovers around $16 to $17 per MMBTU, given that the distance by sea between Qatar and Japan is over 6,000km. However, in an interview published earlier in The News, Board of Investment Chairman Dr Miftah Ismail said that Pakistan may import LNG at a cost of $17 per MMBTU, keeping in view prevalent market prices.

Abbasi said that the distance between Qatar and Karachi Port is not more than 400km and so, the price of LNG should not go beyond $10 per MMBTU.

He referred to the Indian LNG deal with Qatar, saying that the LNG price stands at $10 $12 per MMBTU, and in the current financial year, the LNG price for India did not exceed the figure of $11 per MMBTU.

Abbasi said that the Karachi Port is nearer to the Qatar Port than India’s, so the CIF (Cost Insurance Freight) should be less, adding that there are reports that powerful politicians in the government want to import liquefied natural gas at $17 $18 per MMBTU in Pakistan for the next 15 years so that they can earn commission between $6 and $7 per MMBTU.

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