Under the Radar: UK Production Decreases; Consumption Increases

Link here.

Look at the numbers (some numbers rounded):

Shipments of liquefied natural gas made up the bulk of U.K. gas imports for the first time in the second quarter as indigenous production saw its steepest ever decline.

The data show that, as some analysts predict LNG prices will revisit previous highs next year, there is little prospect for the U.K. to gain any respite from rising domestic energy bills.
 
Indigenous U.K. natural gas production fell by a record 25%.

Net imports of gas were up 5.0% despite demand falling almost 20% the previous year because of warmer weather and lower use of gas in power generation.

That's the UK. Think what is going to be happening in China and India.

And then there's the Japanese nuclear story:

Prices of LNG are expected to rise further because, since the Fukushima nuclear disaster, Japan has had to rapidly increase its gas imports for use in alternative power generation.

Prices on the spot market for LNG could revisit the highs of 2008 if around 80% of Japan's nuclear capacity remains offline, Bank of America Merrill Lynch said earlier this month.

"Government-mandated stress tests have stalled the return of all but one nuclear reactor" in Japan, it said. If the restarts aren't approved, "we estimate LNG demand growth in 2012 could reach 8.0 million tons."

"Should this occur, we see spot LNG prices next year rise to $25 per million Btu, similar levels as those seen in 2008, from $17 per MMBtu currently," it said.