(EnergyAsia, March 31 2011, Thursday) — World demand and prices for liquefied natural gas (LNG) are set to spike this year on account of higher imports from Japan, China and India.

The massive earthquake and tsunami that struck Japan on March 11 caused the shutdown of several refineries and nuclear power plants, forcing the world’s third-largest economy to import additional spot LNG cargoes.

Japan imports around 88 billion cubic metres (bcm) a year of LNG, making it the world’s largest market. It may need to import at least another three billion cubic metres of LNG to offset the loss of its nuclear plants and refineries.

The country has lost about a fifth or 9,700 megawatts (MW) of its nuclear power capacity including a major facility in Fukushima, and 10,831 MW of thermal power generation capacity.

China’s LNG demand is being driven by its growing economy and the government’s programme to wean consumers from coal to cleaner burning fuels such as natural gas.

The additional demand from these two Asian economic giants could significantly push up LNG spot prices after staying just below US$10 per million British thermal this year.

J.P. Morgan & Chase Co has forecast China’s demand for natural gas to reach 135 billion cubic meters this year, up around 20% from 2010 levels. By 2015, China could have developed more than 43 million metric tons of LNG-import capacity and secured some 39 million metric tons of supply through long-term contracts.

LNG traders will also have to contend with short-term demand increases from the Middle East and India which will soon be experiencing warmer weather in the second quarter. Demand for air conditioning in key Middle Eastern and Indian cities rise sharply during the summer when temperatures often exceed 40 degree Celsius.