Trending |
Japan's Tokyo Electric aims to buy Canadian, U.S. LNG“We want to procure LNG from the United States and Canada where prices are linked to Henry Hub.”
TOKYO — Japan’s biggest utility, Tokyo Electric Power Co, is in advanced talks to secure liquefied natural gas (LNG) supplies from North America and help reduce high import prices as Japan cuts reliance on nuclear power after the Fukushima disaster, company officials said on Tuesday.
Plentiful supplies have depressed North American gas prices to just over $3 per million British thermal units (mmBtu), sparking interest from Asian markets, where prices for spot LNG are much higher, at around $13 per mmBtu.
At the same time Japan, the world’s largest LNG importer, has been scouring the globe for supplies of the gas to fuel power stations as most of the country’s nuclear plants have been closed down since the earthquake and tsunami last year caused the worst atomic catastrophe since Chernobyl in 1986.
For Tepco, the operator of the Fukushima Daiichi plant, securing cheaper fuel supplies is a crucial part of its business reform plans as it faces billions of dollars of compensation costs for the disaster. The company was nationalized earlier this year.
“We have been in negotiations with several projects,” Toshiaki Koizumi, the general manager of Tokyo Electric’s fuel department, said at a briefing in Tokyo.
“We want to procure LNG from the United States and Canada where prices are linked to Henry Hub. The talks have made progress, but I cannot say when they will be finalised,” Koizumi said, referring to the main U.S. gas distribution centre.
Any agreement to buy U.S. shale gas will be subject to approval from Washington, which is reviewing whether to allow export licenses for some buyers of the fuel.
Tokyo has been negotiating with Washington since last year to allow more shale gas projects to export LNG to Japan, which hopes to receive LNG shipped via the Panama Canal as early as in 2015.
Chubu Electric Power Co, Tokyo Gas, Osaka Gas Co and Sumitomo Corp have already announced deals to buy U.S. shale gas.
Tokyo Electric is interested in taking LNG offtake but is not looking to buy a stake in upstream shale gas and liquefaction projects due to a lack of funds, Koizumi added.
Currently almost all of Japan’s LNG import prices are linked to oil prices, but many Japanese firms are hoping to shift benchmark U.S. gas prices at Henry Hub, to cut down on import costs.
Japan has rapidly increased LNG purchases since Fukushima, with imports growing 17.9 percent to a record 83.2 million tonnes in the fiscal year ended March 31.
Japan hopes that if the U.S. projects receive formal U.S. government approval as early as 2015, their shipments to Japan are likely to be priced at less than $10/mmBtu.
All five major Japanese trading houses have invested in shale oil and gas projects in North America, spending a total of more than $13 billion since Sumitomo became the first firm to take part in a shale gas development in 2009.
Tokyo Electric is currently expected to buy 24.5 million to 25.0 million tonnes of LNG in the business year ending next March, and a little less than 23 million tonnes in the following business year if it is able to restart its Kashiwazaki-Kariwa nuclear plant next year, Koizumi said.
That compared with 24.1 million tonnes purchased in the business year ended in March.
(C) Thomson Reuters 2012
Topics: , , ,
Energy Videos
Sponsored by Canadian Association of Petroleum Producers
Sponsored by
Advertisement from CAPP
Resource Centre
Canada has extensive regulations for producing and transporting energy
www.raiseyourhandcanada.ca
Think energy developed the Canadian way is good for Canada? Show your support
www.raiseyourhandcanada.ca
Learn more about energy developed the Canadian way.
www.raiseyourhandcanada.ca
Responsible development of Canada's oil and gas benefits all Canadians
www.raiseyourhandcanada.ca
Canada’s oil and gas industry currently account for more than 550,000 jobs across the country
www.raiseyourhandcanada.ca
Provided by
& the Wet'suwet'en First Nation are building partnerships with B.C.'s
Retweeted by
OP-ED: The Canadian Energy Strategy does not replace good work done by companies to date, it builds on it.
OP-ED: Canadian premiers all agree our energy sector is a “primary driver of Canada’s economy.”
Paul Barnes of CAPP
to present on Day 3 - Oil & Gas Safety & Security
Retweeted by
B.C. chem engineer champions environment from within energy industry. RT in support of !
Retweeted by
Content from Twitter
Featured Contributors
Western Business Columnist
FP Reporter
FP Energy Editor
Classifieds
Connect with Us
Follow &Financial Post&
Get every new post delivered to your Inbox.
Join 5,802 other followers}