March 20, 2018 / 6:46 AM / a year ago

CORRECTED-UPDATE 1-Japanese utility turns LNG seller after nuclear reactor restarts -sources

(Corrects sale process in 3rd paragraph to via private negotiation, not tender)

* Cargo to load over May 21-22 - source

* Utility likely reselling its term APLNG cargo - sources

By Jessica Jaganathan

SINGAPORE, March 20 (Reuters) - A Japanese utility that buys liquefied natural gas (LNG) to feed power plants has turned seller of the super-chilled fuel after it restarted a nuclear reactor, reducing its need for gas and potentially driving down spot LNG prices, trade sources said.

With more reactors that have been shut since Japan’s 2011 Fukushima disaster seen restarting this year, LNG demand could be further curbed in the country that is the world’s biggest LNG importer of the fuel, they said - causing supplies to swell and prices to wilt. LNG-AS

Kansai Electric Power Co has offered a spot liquefied natural gas (LNG) cargo for loading in May, three trade sources said on Monday, with the sale taking place via a private negotiation process.

The company offered the cargo on a free-on-board (FOB) basis to be loaded on May 21-22, one of the people said, speaking on condition of anonymity because he was not authorised to speak with the media.

Kansai Electric did not immediately respond to Reuters’ requests for comment on the matter.

Japan’s nuclear restart process has been riddled with delays due to technical trouble and legal challenges, making it difficult for utilities to know whether they will need replacement fuels like thermal coal or LNG. Kansai Electric restarted the No.3 reactor at its Ohi plant on March 14 after a delay of about two months.

“They may need to sell their cargo as they restarted their nuclear (reactor) a week ago...I believe they will be in a sell position,” said one Japan-based trader.

The utility is reselling its term cargo from Australia Pacific LNG (APLNG), a second trader familiar with the Japanese market said. It has a 20-year commitment with APLNG to buy about 1 million tonnes of LNG a year from 2016.

More shifts in Japanese utilities’ LNG needs are expected within the energy industry as 2018 proceeds.

Masakazu Toyoda, chairman and chief executive of the government-associated Institute of Energy Economics, Japan, said in October last year that about five more nuclear reactors will restart by early next year, increasing nuclear’s share of Japan’s energy mix to 6 percent to 7 percent. (Reporting by Jessica Jaganathan Additional reporting by Osamu Tsukimori in TOKYO Editing by Kenneth Maxwell)

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