By TSUYOSHI INAJIMA and YUJI OKADA
Tokyo Gas Co., Japans third-biggest buyer of liquefied
natural gas (LNG), plans to start trading the fuel before
2017 to boost flexibility in shipments and reduce import
costs, the companys new president said.
The company has increased the number of workers at its
Houston office, according to Michiaki Hirose, who begins his
appointment this week.
Tokyo Gas, Japans biggest city-gas distributor, may
resell LNG cargoes to customers in Asia and Europe
, he said in an interview.
Japanese utilities are under pressure to cut fuel spending as
the country imports more LNG for power generation after the
Fukushima earthquake and tsunami in March 2011 forced nuclear
plants to be shut.
The option to resell LNG will allow Tokyo Gas to commit to
buying larger volumes, favoring the company in price
negotiations, said Hirose, who was previously an executive
Tokyo Gas, which currently doesnt have experience in
physical LNG trading, may begin the new business before the
US starts exports from about 2017, Hirose said.
Tokyo Gas plans to buy 1.4 million metric tons/year (tpy) of
LNG from the Cove Point plant in Maryland, it said in
September. The Dominion Resources project
has Energy Department
approval to ship to nations that dont have free-trade
agreements with the US, including Japan.
With increased sources of LNG supply, it has become easier
for buyers to secure flexible terms with sellers such as
Australia and countries in the Middle East, according to
Hirose. These terms include contracts without destination
clauses that restrict the resale of cargoes.
Japan imported 87.49 million tons of LNG last year, up 25%
from 2010 before the Fukushima disaster, Finance Ministry
data shows. The countrys bill for LNG more than doubled
to about 7 trillion yen ($67.8 billion) in that period as the
local currency weakened.