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OIL & GAS
 
Vol. VIII Issue. 50
Japan gas binge ties third-biggest economy to one fuel

29 May 2012

Japanese companies are buying natural gas assets and fields around the world, setting the nation on course to be the first of the 10 largest energy users to bet its future on a less-polluting fuel than oil or coal. Mitsubishi Corp. led purchases as trading and energy explorers bought gas properties in four countries and pledged at least $30 billion to develop deposits. They're capturing supplies to generate power after authorities idled the nation’s 54 nuclear reactors since the Fukushima disaster. The closures, which have doubled gas’s share of Japan’s power mix to about 50 percent, and the spending plans tie the country to a single fuel more than any other major energy- consumer. While that leaves the nation vulnerable to rising prices in the years ahead, the world’s third-biggest economy is gaining an advantage trading the fastest-growing fossil fuel for electricity. Japan’s six major trading companies, which together with Mitsubishi are Mitsui & Co., Itochu Corp., Sumitomo Corp, Marubeni Corp. and Sojitz Corp., had $62 billion in cash as of March 31. Mitsubishi’s cash pile is the highest since 1995, while Mitsui’s is close to the most in at least 20 years. While the U.S. has used hydraulic fracturing to become the world’s largest producer of gas and is becoming an exporter, Japan is solidifying its position as the biggest liquefied natural gas importer.

      
 
 
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