LNG [liquefied natural gas]: Fueling energy demand in the Far East

An overview is presented of the supply and demand outlook for liquefied natural gas (LNG) in the far east, and the basic elements of an LNG supply project in Japan. Power generation is the primary market for LNG in the far east, due to a preference for energy supply diversity, large undeveloped gas resources, drastic improvements in power generation technology, and environmental advantages of natural gas. India and mainland China represent huge potential markets, and projects are under discussion to bring gas by pipeline from Iran or Qatar to both Pakistan or India. The economics of LNG plant development in Japan, including large ($4 billion for field and plant development) capital costs, long-term contracts, government involvement, and gas prices are discussed. Falling yen/dollar exchange rates have substantially bettered the Japanese economy in terms of gas prices. 11 figs., 2 tabs