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Japan’s Tepco in talks with BP to buy LNG

12.05.2013  | 

Tokyo Electric Power is in talks with BP to buy 500,000 mtpy of liquefied natural gas, according to two people with knowledge. Tepco will pay for the fuel using a formula linked to both gas and oil prices.

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By CHOU HUI HONG, TSUYOSHI INAJIMA & EMI URABE

TOKYO (Bloomberg) -- Tokyo Electric Power is in talks with BP to buy 500,000 mtpy of liquefied natural gas, according to two people with knowledge of the discussions.

Tepco will pay for the fuel using a formula linked to both gas and oil prices, said the people, who asked not be identified because they aren’t authorized to speak to the media.

The company is negotiating with potential suppliers to buy as much as 1.2 MMtpy of LNG, said Yusuke Kunikage, a spokesman for Tepco, declining to provide further details. Lynda Goh, a spokeswoman for BP in Singapore, declined to comment.

Tepco currently buys 20.56 MMtpy of LNG through term contracts, according to data compiled by Bloomberg. Prices in long-term LNG purchase contracts, which usually run for more than 10 years, are typically linked to Brent crude, or the so-called Japan Crude Cocktail.



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