Japan 's industry minister said Wednesday that Japan will launch a study this fall on setting up a futures trading market for liquefied natural gas to secure LNG at lower prices, amid increased demand in the country following the nuclear crisis at the Fukushima Daiichi plant, Kyodo News reported.

Economy, Trade and Industry Minister Yukio Edano also called for a change in price-setting mechanisms in the Asian market at the first meeting between LNG producers and consumers in Tokyo, saying Japan, the world's largest LNG importer, has to shoulder mounting costs to procure the gas with only two out of 50 nuclear reactors operating in the country after the Fukushima crisis.

" Japan 's LNG imports before the earthquake (in March last year) stood at Y3.5 trillion, but the amount is projected to reach Y6 trillion in 2012. For the Japanese government and businesses, securing LNG at a low cost poses a major challenge," Edano said.

The prices of LNG imported by Japan have been relatively high as they are linked to crude oil prices under long-term contracts. Edano said with increased LNG supplies following expanded shale gas production in North America , prices there have fallen sharply.

"There have been changes in the paradigm of the LNG market and the current price-setting method linked to oil prices in Asia is no longer reasonable," Edano said. "If the price levels are maintained as they are, Asian countries will increase their use of coal and nuclear power, which would lead to slower demand for LNG."
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