The 10 largest power utilities bought 4.05 million tonnes of LNG compared with 4.99MT in the same month a year ago, a fall of 18.9 percent.
At the same time the utilities, from Hokkaido in the north to Kyushu in the south, consumed 8.1 percent less LNG in gas-fired power stations last month at a time when prices have rarely been as low.
The fall in the nation’s demand was shown by Japan’s largest electricty utility, Tokyo Electric Power Co, which was using only 65 percent of its regasified LNG-fired and oil and coal power station capacity.
According to preliminary statistics released by the Federation of Electric Power Companies of Japan, LNG use for electricity generation by power utilities was just under 4.12MT compared with 4.49MT in October 2014
Purchases of heavy fuel oil and thermal coal by power utilities dropped in October after soaring in September.
Thermal coal purchases, for example, amounted to 5.01MT last month compared with 5.30MT in the same month of 2014, down 5.6 percent on the year-ago period and 13.9 percent lower than in the previous month.
There is now adequate LNG on the spot market at much lower prices and also from new projects seeking long-term contracts not necessarily linked to oil.
Japan also has only two nuclear power plants working and more than 50 others are still closed. LNG demand is likely to be unaffected by competition from this sector until about a dozen plants restart, analysts said.
Before Japan's nuclear shutdown during 2011 and 2012, N-plants accounted for 29 percent of electricity generated, while power plants using LNG, coal and oil provided more than 60 percent of power and the balance was made up from other sources.
The Japanese government is deregulating the domestic residential power market from 2016, ending more than 60 years of monopolies by regional utilities.