Japan’s average price for imported liquefied natural gas (LNG) fell to its lowest since September 2009, dragged down by declining oil markets, offering relief to the countries’ utilities which had been burning record amounts of the fuel after the Fukushima disaster.
LNG import prices averaged $8.84 per million British thermal units (mmBtu) in May, the lowest since $8.28 in September 2009, Reuters calculations based on finance ministry data showed on Monday.
Japan, which takes in about a third of global LNG shipments, spent a record 7.78 trillion yen ($63.25 billion) purchasing a historically high 89.07 million tonnes of the fuel in the last fiscal year ended March 31, to offset the shutdowns of nuclear reactors following the metldowns at Fukushima in 2011.
A flood of new supply coming on stream later this year in Australia and the United States is capping the price of LNG. Japan’s May import price is only about $1.50 higher than spot prices in Asia.
Asian LNG spot prices for August delivery were $7.30 per mmBtu last week. Energy Aspects revised its northeast Asia LNG third-quarter price forecast to $7 from $8.
The majority of LNG imports in Japan are oil-linked long-term contracts that respond to falling oil prices with a time lag of several months.
Japan’s LNG imports for the first five months of the year totalled 36.65 million tonnes, down 2.1 percent from a year earlier, according to the Ministry of Finance’s trade data.
Imports from Papua New Guinea were the cheapest on a cost, insurance and freight (CIF) basis last month at $7.73 per mmBtu.
The trade ministry earlier this month skipped publishing monthly LNG spot price data due to a lack of spot trades in May, the latest sign of tepid global demand for the fuel.