Australian demand for LNG to rise after Japan nuclear crisis

The nuclear crisis in Japan is likely to lead to increased energy demand for liquefied natural gas (LNG) in Australia the short term, according to the head of one of Australasia’s leading energy companies, Origin Energy.

In a teleconference, managing director Grant King said the company was only at a stage where it was still thinking about the enormous catastrophe in Japan.

"It's tragic for all the people who have been affected and, quite frankly, we're at that stage in the process where our thoughts are more to them than to what the future holds," King said after Origin Energy Ltd announced on Tuesday it would issue $2.3 billion in new shares.

His comments came prior to news that radiation is spewing from damaged reactors at a crippled nuclear power plant in tsunami-ravaged northeastern Japan.

King said a large amount of power generation had been shut in Japan.

"Obviously a substantial amount of the nuclear fleet and, I think, I'm not adding any original insight to the comment that the balance of fuel in Japan is LNG," King said.

He said LNG demand increased after an earthquake in Japan about four years ago caused one nuclear plant to go down.

"It was very noticeable, at that time, the additional LNG demand in Japan to back up their fuel system accordingly," he said.

Matthew Moore, an assistant vice-president and analyst at Moody's Investors Service, says demand for LNG in Japan will increase.

"Last Friday's devastating earthquake and tsunami in Japan will likely raise that country's demand for oil and liquefied natural gas over the near term, as it deals with challenges related to its nuclear energy generation," he said in a statement on Tuesday regarding oil prices.

"However, it is unclear at this point whether this will have any sustained impact on the oil sector's fundamentals."

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