TEPCO LNG must jump as rewrites Japan policy: energy markets

April 20, 2011, 9: 00 am EDT by Shigeru Sato and Yuji Okada

April 20 (Bloomberg) - Tokyo Electric Power Co., about a quarter of the Japan of electricity producer, can increase imports of liquefied natural gas by 50 percent to compensate for the output lost as a result of an earthquake and tsunami of last month.

The closure of 14 per cent of the capacity of the company will force to stimulate foreign LNG purchases by 5 to 10 million tonnes per year in three to five years, a survey of Bloomberg News four of traders and analysts. Extra cost may be 500 billion yen ($6 billion), based on the data of Ministry of finance for the average price of last year.Tokyo Electric is trying to contain leaks of radiation at its plant in Fukushima Dai-Ichi in what became the worst nuclear accident since the collapse of Chernobyl 1986, in Ukraine. The utility, known as Tepco, is also being advocated by the Government to take measures to avoid blackouts in the capital and eight surrounding prefectures, a region which account for approximately 40 per cent of the domestic product gross of the Japan. "A change to fossil fuels like oil and natural gas will be accelerate in the years to come as the Japan will be forced to rewrite its energy policy," has said Hidetoshi Shioda, analyst at SMBC Nikko Securities Inc. in Tokyo that predicts the Japan can raise LNG imports by 10 million tons per year over the five " next years. Before the earthquake, policy "aimed to revive the dependency on nuclear power and dependence of cutting oil."Natural gas GainsWinter-delivery of award to the United Kingdom, the reference for spot in Europe prices, increased by 8.3% since the eve of the disaster, according to the price of the broker on Bloomberg. Gas for delivery in the six months to October increased by 0.8% to 72.25 pence a therm, equal to $$ a thermal British units, as of 1 h 50 million in London today. LNG is cooled to about minus 260 degrees Fahrenheit (minus 162 Celsius) gas for shipping in liquid form between locations not connected by pipelines.TEPCO bought 20.4 million tons of LNG by 2010, according to data from the company. It is 29 percent of whole the Japan of 70 million tonnes imports, data compiled by the Ministry of finance show. The Tokyo-based company has about 26 000 megawatt generators powered the gas, or 40% of the overall capacity of the company of 64,487 megawatts.TEPCO, which lost 78% of its value since the earthquake on March 11, can install gas turbines in existing power plants and construction of gas generators on the coast of the Pacific Ocean to try to combat the shortage of powerShioda of the SMBC said.As a first step, the company expects to add 112 megawatts of engines to gas at its plant in Sodegaura thermal power in July and 668 megawatts of gas turbines at its site in Chiba in August, the company said on April 15. The utility is designed to install an other gas turbine of 334-megawatts to Chiba in August next year.Nuclear ReviewGeneral Electric Co. Chief Executive Jeffrey Immelt unveiled a plan on April 4 to help energy shortages address Tepco.Le March 31, the Prime Minister Naoto Kan said that his Government plans to review the revised in June of last year's national energy plan. The plan includes building nine new reactors by 2020 and to raise utilization of existing reactors at 85% per year of approximately 60% in 2008, according to a copy of the energy policy posted on the website of the Ministry of trade. It also calls on five additional reactors by 2030.Generating one megawatt of electricity to a gas generator can require 1,000 tons of LNG per year, according to two of the four surveyed merchants. One megawatt is enough to power 800 US households, according to estimates of the Department of energy in Washington.Outage ThreatThe Fukushima Dai-Ichi and Fukushima Dai nuclear stations combined capacity - or be 9,096 megawatts, or 14% of the total of the Tepco, according to the data of the company. Plants were closed after the magnitude 9 quake, of the strongest on record of the country. The Japan has a maximum output of 281,099 megawatts, including internal generators to factories, according to data compiled by the Federation of the Companies.Tokyo of electrical power and the neighbouring prefectures eight - zone Tepco supplies - can have a shortage of 15 000 MW should temperatures approaching the level of last year this summer. Kan's administration to propose conservation plans that invites companies to reduce 25% energy consumption has prompted by the threat of blackouts this summer.Generally, the summer of the Japan begins from the end of July and lasts about three months. The country has experienced its hottest summer at least 113 years last year.

-With the help of Alexander Kwiatkowski Singapore and Ben Farey in London. Editors: Alexander Kwiatkowski, Rob Verdonck

To contact the reporters on this story: Shigeru Sato in Tokyo at the ssato10@bloomberg.net; Yuji Okada at Tokyo to the yokada6@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji in csomayaji@bloomberg.net-0-Apr/20/2011 12: 56 GMT

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