Japan's appetite for LNG has ripple effect

May 17, 2011 at 7:48 AM
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LONDON, May 17 (UPI) -- Increased Japanese consumption of liquefied natural gas following the March 11 earthquake and tsunami could put strains on the global market, investors say.

A magnitude-9 quake and subsequent tsunami crippled parts of the Japan's nuclear power sector and created an energy deficit that has been addressed by increased LNG imports.

A research note by Barclays Capital said increased LNG consumption by Japan could have an effect on the global market by the end of the year.

"We now see risks for supply tightness into the end of 2011," bank analysts were quoted by the Platts news service as saying. More constraints were expected in 2012, Barclays added.

The report noted that North America gets only about 2 percent of its energy from LNG and Europe could make up for any shortfall once the Nord Stream pipeline from Russian is online by the end of the year.

In general, economic uncertainly in natural gas-rich Egypt and oil-rich Libya could continue to drag on global energy markets, the Barclays report added.

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