(EnergyAsia, April 7 2011, Thursday) — Natural gas is emerging as a beneficiary of the ongoing crisis at Japan’s Fukushima nuclear power complex, according to global business research and consulting firm, Frost & Sullivan.

The crisis is a huge public relations disaster for the nuclear industry as it struggles to contain the huge radiation leaks from four of the complex’s four reactors, said Ravi Krishnaswamy, vice president, and Subramanya Bettadapura, associate director, of the firm’s Energy & Power Systems Practice in the Asia Pacific.

In an article, the consultants said that countries around the world had planned to introduce nuclear as a fuel mix option, but some previous strong supporters like Germany and Switzerland are now either shutting down old nuclear plants or putting on hold new developments. Still, others including USA, Italy, Poland and Indonesia have vowed to go ahead with their plans.

The authors said that natural gas demand has strengthened on recent increased sale of liquefied natural gas (LNG) cargoes to Japan, and the prospects that the added new demand is likely to be permanent rather than short term. Natural gas and coal-fired power plants will be called upon to make up for the loss of around half a dozen nuclear power plants which will be shut down for at least three years, if not forever. Prices for both coal and natural gas are likely to increase in the short term and will remain supported over the longer term.

Frost & Sullivan said that Japan is the world’s biggest importer of LNG, sourcing almost 70% of its annual LNG imports from Australia, Indonesia, Malaysia and Brunei. Even before the Japan disaster, natural gas prices were forecast to rise to US$5 to US$6 per million British thermal units (MMBTU) by 2012 due to rising demand. They are now poised to rise further on the Japanese nuclear crisis and events in the Middle East.

The authors noted natural gas cargoes are being diverted from regular customers in Europe to Japan, causing European gas prices to spike. Qatar, which supplied around 12% of Japan’s total LNG imports in 2009, will help meet the additional Japanese demand, giving anxious moments to Europe who must now scramble to find back-up supplies.

The authors expect Qatar’s LNG supply to Japan to double in 2012 from 2009 levels.

Apart from conventional sources of gas, they expect unconventional sources such as coal seam gas (CSG) and shale gas to be exploited to meet growing global demand. Despite bad press regarding the impact of CSG industry’s environmental impact, the adverse impact of the CSG industry on the community pales in comparison to the immediate impact that a nuclear power disaster can have.

Most of the CSG-to-LNG projects in Australia are now much more likely to benefit from the aftermath of the Japan incidents, said Mr Krishnaswamy and Mr Bettadapura.