Saturday, June 16, 2012

Grand Plans for Gas Pipelines

Yet another Nikkei Shimbun report, on June 13,  indicates that the METI "Natural Gas Shift Basic Infrastructure Specialist Committee" (my attempt at a translation) issued a report.  In light of the expected future global increase in gas supply, including from U.S. shale gas and other sources, there is a need to improve the Japanese network of gas pipelines and gas storage facilities.  METI wants to establish a basic policy this year on future facilities. 

The plan includes new pipelines from Yokohama to Aichi (near Nagoya), from Himeji (Hyogo) to Kita Kyushu, from Nagaoka (Niigata) to Saitama Prefecture, and also from Nagaoka to Shiga Prefecture.  There also is a plan to store gas by re-injecting it into depleted fields in Niigata near Nagaoka.

The government proposes that the cost of these pipelines be borne by the gas companies and consumers, but with government assistance on regulatory and tax matters to help get the pipelines built.  

Japan clearly needs to take advantage of what looks like many years, even decades, of future cheap natural gas around the world, if it is going to survive as an industrial power.  And Japan needs this kind of infrastructure if it is going to attract investment in gas cogeneration power plants that can help to fill the gap left by nuclear power -- which seems at best likely to decline gradually as the current plants go through a run off mode.

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