Petroleum consumption from Japanese power producers is falling fast.
Data released today by the Federation of Electric Power Companies in that nation showed some big declines. Japanese power companies’ LNG consumption dropped 11.6% year-on-year during May, to 4.17 million mt. Oil consumption fell even more, dropping 35.5% to 350,620 b/d.
The declines are largely due to Japan’s nuclear power stations coming back online. Nuclear plant operating rates were 5.2% in May. Compared to just 0.3% a year earlier.
This trend will continue as Japan’s nuclear sector gets back on its feet. Which may affect some of the grandiose plans trotted out recently for big LNG developments globally. (Just this week, Malaysia’s Petronas said it will spend up to $16 billion on LNG projects in British Columbia.)
The Japanese fuel market today is an anomaly. It will look very different in a few years.
Making plans based on today’s demand and pricing may thus be a risky business.
Here’s to looking down the road,
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