Tokyo Gas, Kyushu Ink Strategic LNG Pact

Tokyo Gas and Kyushu Electric Power said April 12 they have agreed to forge a strategic alliance in LNG procurement.

The two large Japanese utilities have cooperated in the past in developing new joint venture power plants. Now they intend to further optimise LNG procurement with a view to contributing more flexibility and cost-reductions to their supplies, they said in a joint statement April 12.

They also said they would cooperation to secure LNG to stabilise supplies to both companies in the event of an emergency.

Last month the 50-50 trading joint venture of Tokyo Electric and Chubu Electric, Jera, announced a far-ranging partnership to work collaboratively with South Korea's Kogas and Chinese state CNOOC on sourcing, transporting and storing LNG. 

It means many of Asia's biggest LNG buyers have now signed up to strategic alliances relating to LNG procurement, and comes in the week that G7 energy ministers in Rome called on incumbent LNG suppliers to roll back restrictions in LNG contracts, such as destination clauses.

Also a few days ago, Jera signed a memorandum of understanding with Dubai Supply Authority (Dusup) for cooperation in the LNG business

Being the world largest LNG import market, Japan has worked hard to form alliances in order to make LNG procurement more affordable for large Asian consumers. Another big Asian consumer India too has expressed willing to join any alliance which helps buyers get a better price in global LNG market. 

Shardul Sharma