Tokyo Gas Mulls LNG Trading Business

Japanese utility Tokyo Gas plans to establish a new entity to boost LNG trading activity and make it a mainstay for the company, it said March 25 in its 2020-22 medium-term management plan.

“With regard to LNG, one of the group’s strengths, we will shift from viewing LNG as a raw material of gas and electricity delivered to our clients to viewing it also as “product.” Increasing the flexibility and competitiveness of our procurement portfolio, we will work to expand our LNG operations through asset-backed trading, and through terminal operations that are integrated with overseas LNG demand,” the company said.  

Tokyo Gas, one of the biggest buyers of LNG, plans to collaborate with other companies to pursue transaction opportunities. “Co-operation with Centrica, RWE and other business partners will provide flexibility with respect to procurement and sales contracts and expand LNG swap transactions that utilise ships, LNG terminals, thermal power plants and other assets,” it said.

Working with business partners, the company will use digital technologies to achieve an optimal combination of the strengths of existing assets in the LNG value chain such as LNG transactions, LNG ships, receiving terminals and so on in order to expand LNG transaction volumes.

“In addition, we will expand demand by providing shipping and other operations that constitute our strengths as an added value for LNG transactions. We will also reduce costs by increasing LNG transport efficiency through location swap, using the Tokyo Gas group fleets and destination-free project LNG,” the company said.

Tokyo Gas is focusing on building LNG infrastructure in Asia where the demand for gas is increasing. The company already has a significant presence in southeast Asia.

In the Philippines, Tokyo Gas has formed a joint venture with Manila-listed First Gen to build an LNG import terminal, work on which is expected to start in May. In Taiwan, Tokyo Gas Engineering Solutions Corporation (TGES), a unit of Tokyo Gas, has got the front end engineering design (Feed) work from CPC Corporation for an expansion project of its LNG receiving terminal at Yung An. In Vietnam, Petrovietnam Gas (PV Gas), Bitexco and Tokyo Gas have established a joint venture entity, LNG Vietnam.