WRAPUP 1-US execs eye energy mix shift after nuclear crisis

* Apache’s western Canada project to feed natgas to Asia

* Schlumberger sees more bullish growth in natgas demand

* Valero sees more fuel exports to Latin America as result

By Braden Reddall and Anna Driver

NEW ORLEANS, March 28 (Reuters) – Leading energy companies
expect the nuclear disaster in Japan to underpin a shift toward
the increased use of natural gas worldwide, executives said at
a U.S. industry conference on Monday.

That would work well with the plans of U.S. producer Apache
Corp (APA.N: Quote, Profile, Research), which with partners aims to build an export
terminal for liquefied natural gas in western Canada to serve
Asian customers.

“That gas becomes more interesting to the market than it
probably was three months ago,” Steve Farris, Apache’s chief
executive, told the Howard Weil Energy Conference in New
Orleans.

Apache is advancing plans to open the Kitimat LNG terminal
in Canada, where it holds shale gas acreage. [ID:nN28190170]

The nuclear disaster gripping Japan could have long-term
implications for all gas producers if Japan backed away from
nuclear power. Already, official industry projections are for
natural gas demand to grow by about 1.5 percent annually
through 2035.

Andrew Gould, CEO of leading oilfield services company
Schlumberger Ltd (SLB.N: Quote, Profile, Research), said other forecasts are even more
bullish, projecting annual growth rates of about 2 percent.

“A reassessment of the energy mix following the nuclear
accident in Japan is likely to confirm higher demand growth for
natural gas,” Gould said in his presentation at the
conference.

The crisis is already shaking up Japan’s LNG trade. Tokyo
Gas Co (9531.T: Quote, Profile, Research), Japan’s biggest city gas supplier, said on
Monday it had diverted an unspecified volume of LNG to Tokyo
Electric Power Co (9501.T: Quote, Profile, Research) to make up for output lost from two
nuclear plants after this month’s huge quake. [ID:nL3E7ES03H]

While TEPCO may have spare fuel supplies now, as some of
its thermal plants remain shut following the quake, it has said
it will need more fuel, mainly LNG, for the summer to maximize
thermal power production. [ID:nL3E7EP0BA]

The magnitude 9.0 quake on March 11 forced the closure of
23 percent of its total power sources, including hydro plants.

The impact on fuel markets has been felt in pockets
elsewhere, ranging from a boost to LNG stocks in Britain[ID:nLDE72R0HS] to trans-Pacific trade.

Bill Klesse, CEO of U.S. refiner Valero Energy Corp
(VLO.N: Quote, Profile, Research), said at the conference that his company may benefit
from higher exports to Latin America, which is an importer of
Japanese fuel products, as Japan recovers from the earthquake
and tsunami.
(Reporting by Braden Reddall, editing by Gerald E. McCormick)

WRAPUP 1-US execs eye energy mix shift after nuclear crisis