Japan’s Tokyo Gas, Kansai Electric to partner on LNG procurement

4/11/2016

By Osamu Tsukimori

TOKYO, April 11 (Reuters) -- Japan's biggest city gas supplier Tokyo Gas and second-biggest power utility Kansai Electric Power Co. said on Monday they will partner up on liquefied natural gas (LNG) purchases and share technology for gas-fired power plants.

Both utilities are among the biggest LNG buyers in Japan, which takes in about a third of global shipments of the fuel.

The two firms have successfully completed their first swap of the super-chilled gas last Thursday, Tokyo Gas officials said, declining to give details.

They also plan to pursue further cooperation in flexible LNG procurement, aiming to achieve stable supplies at lower prices, said Takayuki Uenaka, the group manager of corporate planning at Tokyo Gas.

The two firms have no plan to match the LNG joint-buying venture between Tokyo Electric Power and Chubu Electric Power, he told reporters. The tie-up, called Jera Co., created the world's biggest LNG buyer.

The competition among Japanese power and city gas utilities intensified this month when the companies lost their monopoly control over the retail power market in an unprecedented shakeup that could give a much needed jolt to Japan's long stagnant economy.

The business environment is set to become even tougher next April when city gas suppliers will also lose their monopoly on the retail city gas market.

Uenaka said the deal with Kansai does not prevent it from pursuing ventures in LNG procurement with other firms and added there was no plan to cooperate with Kansai on the retail power and gas business at the moment.

Tokyo Gas will also send its staff later this year to Kansai Electric to receive training from the Osaka-based power utility on the operations and maintenance of gas-fired power plants, Tokyo Gas added.

The two firms will also jointly consider areas for possible cooperation in new power plant development and overseas business, the two firms said.

(Reporting by Osamu Tsukimori; Editing by Christian Schmollinger)