As Pressure In Reactor 3 Builds Again, Here Are The Downstream Effects From The Fukushima Catastrophe

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As the world awakes, Japan discloses another round of good news/bad news about the Fukushima crisis. The good news: Reactors 5 and 6 went into stable condition on Sunday, after a successful
cold shutdown, authorities said. The reactors at the power plant went into cold shutdown following restoration of cooling
functions late Saturday. Alas, 5 and 6 were never the issue to begin with. The same came not be said about reactors 1 through 4, where the bad news comes from this morning. According to the Japan Times, a risky venting of Reactor 3, which saw its pressure rising yet again, was being considered, which would see another release of radioactive gas into the environment. "Pressure within the No. 3 reactor at the Fukushima No. 1 nuclear plant
was rising at one point and Tepco considered releasing more radioactive
gas into the environment to avert serious damage to the containment
vessel, the nuclear safety agency said Sunday afternoon. Tokyo Electric Power Co. had considered releasing the contaminated steam
directly into the environment, not through a "suppression pool" as it
did earlier in the crisis. The pressure needs to be lowered to protect the structural integrity of
the reactor, and the first step is to open the valve on a pipe connected
to the suppression pool. By going through the suppression pool, the
reactor's gas would liquefy and thus lower the pressure." And here is where the recent Operation Irrigation is now backfiring: "But if the pool is already filled with water, a valve on the reactor
itself would need to be opened and the radiation level of the released
gas would be higher than with the first method,
explained Hidehiko
Nishiyama of the Nuclear and Industrial Safety Agency. "Without water, there would be more radioactive substances in the gas released into the environment."" In other words, the attempt (which some say is futile) to fill the containment pool with water is about to lead to another round of irradiation of the environment. And while all that is going on, here is what the already certain chain of downstream events is going to look like for the region, for Japan, and for the world.

From Reuters, the following is a roundup of the effect on the
energy and commodities sector of the devastating earthquake and tsunami
that struck the northeast coast of Japan.

UTILITIES

  • Japan saw some success in its race to avert disaster at a
    tsunami-damaged power plant, though minor radiation leaks underlined
    perils from the world's worst nuclear crisis since Chernobyl 25 years
    ago.
  • Japan may have reached a turning point in winning its
    week-long battle to prevent a massive radiation leak when it succeeded
    in connecting a power transmission line to the disabled Fukushima
    Daiichi nuclear plant.
  • Japan is considering whether to halt
    sales of food products from near a crippled nuclear plant because of
    contamination by a radioactive element which can pose a short-term
    health risk, the U.N. atomic agency said.
  • Russian Prime
    Minister Vladimir Putin proposed freeing up energy for Japan by
    increasing gas supplies to Europe and offered Japanese companies a slice
    of Siberia's gas industry.
  • Japan has raised the severity
    rating of the nuclear crisis to level 5 from 4 on the seven-level INES
    international scale, putting it on a par with the Three Mile Island
    accident in Pennsylvania in 1979.
  • Power blackouts can be avoided in the Tokyo area if demand stays at the current level, the trade ministry said.
  • TEPCO has announced rolling blackouts after its power generation was cut.
  • Japanese utility Tohoku Electric declares force majeure on its near-term thermal coal shipments due to port damage.

REFINERIES

  • Japan's demand for oil, refined products and gas will increase in the
    medium term, but this will not have a significant impact on global
    supply and demand, Saudi Aramco CEO Khalid al-Falih told Reuters.
  • Showa Shell Sekiyu KK said on Friday that it has started full output
    at its four group refineries as part of efforts to ease a severe supply
    shortage after a powerful quake hit northeast Japan a week ago.
  • Showa Shell, 35 percent owned by Royal Dutch Shell and 15 percent by
    Saudi Aramco, said its four group refineries with total capacity of
    655,000 barrels per day have been making both surface and marine
    shipments.
  • JX Nippon Oil & Energy Corp, an oil refining
    unit of JX Holdings , boosts oil product output at two refineries in
    western Japan by 30,000 barrels per day in the wake of a supply shortage
    in the east of the country.
  • It is also taking other emergency
    measures, including importing oil from South Korea, buying from other
    refiners and cancelling exports.
  • Long lines have been forming
    at gasoline stations in Tokyo while many JX Nippon stations have been
    forced to close after running out of fuel.
  • Oil product
    output in Japan will recover to 3.4 million barrels per day by the end
    of March, a level above domestic demand, as idled refineries resume
    operations, said an oil industry body.
  • The government has
    asked 13 refineries in operation in West Japan to boost their running
    ratio to help ease the supply shortage.
  • JX Holdings is in talks with South Korea and China on oil products imports to help Japan meet its energy needs.
  • AOC Holdings says its refiner Fuji Oil Co has increased runs at the
    two fluid catalytic cracking units at its 140,000 bpd Sodegaura refinery
    after briefly reducing operations after the earthquake .
  • Three Japan-bound naphtha shipping fixtures from the Middle East,
    totalling 205,000 tonnes, fails to be completed due to the shutdown of
    several Japanese crackers.
  • Valero Energy said it is ready to
    supply refined products, such as gasoline and diesel, from its U.S. West
    Coast refineries to Japan.
  • JX Holdings says the refinery of subsidiary Kashima Oil Co remains shut.
  • JX Holdings declares force majeure on its refined product supplies as
    its stocks are depleted and distributions disrupted. The company is
    working to boost output at its refineries that are still operating and
    diverting products to domestic use instead of exports to meet a supply
    shortfall.
  • Maruzen Petrochemical Co Ltd shuts its sole naphtha
    cracker in Chiba, east of Tokyo, with capacity to produce 480,000
    tonnes per year of ethylene.
  • Kyokuto Petroleum has restarted its 175,000 barrels per day (bpd) Chiba refinery.
  • JX Holdings shuts its 404,000 tonnes per year Kawasaki naphtha cracker near Tokyo.
  • Japan's Exxon Mobil group refiner TonenGeneral Sekiyu KK prepares to
    restart its 335,000 barrels per day Kawasaki plant, near Tokyo.
  • Mitsubishi Chemical halts two naphtha crackers at its Kashima plant after a power outage.

METALS

  • China's term shipments for refined copper from Japan may stay normal
    in March and April, though May and June remain a question mark after a
    massive quake forced some Japanese copper producers to stop production
  • Toho Zinc Co stops operations at its 139,200 tonnes per year Annaka
    zinc smelter and Onahama plant, which is used to treat zinc for
    smelting.
  • Japanese steel mills divert metallurgical coal
    cargoes due to plant outages. Possible destinations for the coal include
    South Korea and China.
  • Production at JFE Steel Corp's
    10-million-tonne per year Higashi Nihon plant is still halted due to
    power outages. JFE Steel is the world's No. 5 steelmaker. Fourth-ranked
    Nippon Steel has suspended operations at one small plant.
  • Sumitomo Metal Industries Ltd , Japan's No. 3 steelmaker, says
    production at its main Kashima plant in Ibaraki prefecture remains
    suspended.
  • Sumitomo Metal's main Kashima plant has a fire in a
    gas holder, which has been extinguished but the company says it does
    not know yet when the plant will resume operations. Sumitomo Metal has a
    total capacity of 14 million tonnes a year and the Kashima plant
    produces 8.3 million tonnes.
  • Nippon Steel's small Kamaishi
    plant, which had produced 60,000 tonnes a month of downstream steel
    products, remains shut. The company has resumed operations at a small
    seamless steel plant in Tokyo after briefly shutting it on Monday due to
    rolling power outages.

PORTS

  • Shipping
    companies are confident of keeping goods moving through Japan's ports,
    using spare capacity at the largest to deal with cargo displaced from
    those devastated in last week's earthquake and tsunami.
  • Japanese ports handled 19 million units -- measured in twenty foot boxes
    -- of container shipments last year. As much as 7 percent of that had
    been shut off after the quake and tsunami hit northern Japan.
  • Two piers at the medium-sized Onahama seaport in Fukushima prefecture are now available for 30,000 tonne vessels.
  • Two smaller seaports further up the coast, Miyako in Iwate prefecture
    and Hachinohe in Aomori prefecture, will restore functions by the end
    of Thursday.
  • Japan's Sendai Gas says it will likely take more
    than a month to restart its Shinminato liquefied natural gas facility.
    All the remaining LNG terminals in Japan are in operation.
  • Three Japan-bound naphtha shipping fixtures from the Middle East,
    totalling 205,000 tonnes, fail to be completed after last week's quake
    forced the shutdown of several Japanese crackers.
  • The
    northeast coast ports of Hachinohe, Sendai, Ishinomaki and Onahama are
    so severely damaged that they are not expected to return to normal
    operations for months.
  • Hachinohe handles a wide variety of
    goods, including fuel products to the local fishing fleet and U.S.
    military installations in Japan and South Korea. Other ports handle
    goods ranging from coal and rubber to LNG and machinery.
  • The
    large container and oil port of Kashima is also closed, but officials
    expect four out 11 berths to resume operations in two weeks.
  • Other damaged ports include Hitachinaka, Hitachi, Soma, Shiogama,
    Kesennuma, Ofunato, Kamashi and Miyako. The ports handle products
    ranging from sugar and non-ferrous metals to cars and wood products.

 LNG

  • Analysts say Japan may need to import about an extra 1 billion cubic feet of liquefied natural gas per day to make up for its lost nuclear power. Asian spot prices have risen by around 10 percent since the quake on expectations of higherdemand.
  • Royal Dutch Shell (RDSa.L) said on Friday two extra shipments of LNG from a Brunei plant have unloaded in Japan.
  • Indonesia may export surplus LNG to Japan. Energy officials could not say how much gas was available from a fieldoperated by Total (TOTF.PA), but one government minister said the decision would go up to the president, given Indonesia is trying to conserve LNG for its own growing domestic demand but also please Japan, a major infrastructure investor.
  • South Korea said on Friday Korea Gas Corp (036460.KS), the world's top corporate buyer of LNG, would supply 400,000 to 500,000 tonnes to Japan.
  • Top exporter Qatar says it is ready to increase shipments to Japan, its long-term buyer.
  • Energy trading house Vitol has offered two cargoes of LNG to Japan's Tokyo Electric Power Co (TEPCO) (9501.T).