TEPCO's LNG Purchases Rise to Record (TGP, GLNG)

After the devastation of the Japanese earthquake and the closer of its Fukushima Dai-Ichi and Dai-Ni nuclear power stations, Tokyo Electric Power TKECF purchased a record amount of liquefied natural gas in March. TEPCO purchased 2.14 million metric tons of LNG in March, an increase of 9.9% from a year earlier. As a part of its efforts to ensure power supplies and offset the 9,096 MW worth of power lost from the down reactors, the company plans to add 1,000 MW of gas turbines by July. Japan is the already the largest importer of LNG in the world, accounting for more than 36% of global LNG imports in 2009. The loss of nearly 10% of its nuclear capacity will have it looking at increasing its use of LNG sources. Overall, analysts estimate that the market for LNG imports will grow an incredible 8.2% per year, over the next ten years. Much of that growth will come from Asia, where emerging markets such as Indonesia, Vietnam and the Philippines are beginning to expand construction of coastal re-gasification import terminals. For investors looking to play the continued rise of LNG usage in Japan and the remaining Pacific, shippers Teekay LNG Partners TGP and Golar LNG GLNG represent great plays. Shipping rates have doubled from less than $30,000 a day to over $60,000 since the summer. While both tend to operate on longer-term contracts, any increased charter pricing will benefit the pair as these contracts are renewed.