Reuters: Japan's TEPCO plans for LNG buyers' group

In the first concrete moves towards forming a buyers' group for liquefied natural gas (LNG), Tokyo Electric Power Co is proposing to rope in domestic and foreign firms to jointly procure up to 40 million tonnes a year of the fuel to cut costs.

The Japanese utility's plan comes as importers in Asia, the biggest market for the superchilled fuel, are stepping up efforts to leverage their buying power to reduce what they say are inflated prices because of the practice of linking the price of gas to oil.

Officials from India, China, South Korea, Japan and Taiwan which import about 70 percent of the world's LNG have held talks last year but no firm steps had materialized. LNG producers are resisting the idea of joint purchases, fearing that an end to long-term supply contracts with individual buyers will hurt them.

Tokyo Electric's LNG proposal is outlined in a business revival plan that was approved by the government this week to cut costs at the utility, which is facing compensation demands and cleanup costs of tens of billions of dollars after the meltdowns at its Fukushima Daiichi nuclear plant north of Tokyo. MORE