Japan, Europe launch joint study to cut LNG prices
By MARI IWATA
TOKYO -- Japan and Europe will start a joint study about liquefied natural gas, seeking ways to lower prices of the liquid fuel, Japan's Ministry of Economy, Trade and Industry said Friday.
Senior officials of the European Commission and METI will have a first meeting of the study in Brussels later Friday, a METI official said.
"Prices of LNG under long-term contracts are more or less linked to oil in both regions, though we are not sure if it's reasonable [to price LNG this way]," said Koji Yamashita, the METI official set up the meeting.
Supply and demand situations should decide prices, and the two sides will study how they can eliminate oil-link pricing and the possible ramifications by such an elimination, Mr. Yamashita said in a telephone conversation.
Since the Fukushima accident in March 2011, Japan's demand for LNG has risen sharply as utilities ran gas-fired power plants on full steam to make up for idle nuclear power capacity.
As a result, the country's annual demand for LNG rose 23% and the bill surged by 75% in the next two years, helping widen Japan's trade deficit, data from the government show.
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