Kansai Elec to form trading unit in Singapore to boost LNG trades
TOKYO (Reuters) -- Japan's second-biggest power utility Kansai Electric Power Co Inc said on Monday it would set up a trading unit in Singapore next month to reinforce its trade of LNG and win better deals.
The move comes as Japanese utilities ditch old long-term gas and coal supply contracts in favor of more short-term, opportunistic trading to offset a shrinking customer base.
Japan's JERA Co, a fuel joint venture of Tokyo Electric Power Company Holdings and Chubu Electric Power Co, already has a coal trading unit in Singapore and the unit is set to buy the coal and freight trading business of French state-controlled utility EDF by early April.
"We've been considering to create a structure with more flexibility to be able to buy LNG at low prices and sell LNG when needed as spot trades are becoming more important to reflect change in demand in an era of real competition," Kansai Electric said in a statement.
By building a foothold in Singapore, the center of Asian LNG sellers, buyers and traders, the Osaka-based company wants to gather information and increase direct trades to strike deals at right prices and at right timings, it said.
The new unit, to be called as KE Fuel Trading Singapore Pte Ltd, will handle most of the company's spot LNG trades.
Reporting by Yuka Obayashi; Editing by Amrutha Gayathri
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