Gas Processing is Produced by Gulf Publishing Company

Your source for technology information for the gas processing industry


Japan's Tokyo Gas wants to revise LNG supply contracts

TOKYO (Reuters) — Japan's Tokyo Gas, the biggest city-gas supplier in the world's largest importer of LNG, is in talks to renew supply contracts and will push to revise terms to get more flexibility and cut prices, a senior official said on Thursday.

Tokyo Gas Lng Resized
Photo Courtesy of Tokyo Gas.

The push for easier terms, a major concern among Japanese utilities after the Fukushima nuclear disaster 6 yr ago led to a surge in LNG imports and drove prices higher, got a boost when the country's anti-trust regulator last month ruled restrictions in supply contracts were anti-competitive.

"We have re-negotiations under way, including price review," said Takashi Higo, senior general manager at the gas resources department of Tokyo Gas.

"There will be tough negotiations (with suppliers) and it will take a lot of time," he added, speaking to reporters at an energy conference.

The decision by Japan's Fair Trade Commission to rule that so-called destination clauses that restrict resale of LNG cargoes are anti-competitive is likely to lead to more trading by buyers in Japan and could prompt challenges to similar restrictions elsewhere in Asia.

Asian LNG buyers have long complained that having destination clauses in LNG contracts unfairly restricts trading of the fuel at times when it would make more economic sense for buyers to on-sell supplies to other markets.

"I 100% agree with the decision of Japan's Fair Trade Commission," International Energy Agency's chief economist, Laszlo Varro, said on Thursday at the same conference. "Destination restrictions are restricting markets."

Higo said Tokyo Gas has 12 supply contracts and it is reviewing their terms to decide what action to take.

Tokyo Gas has long-term LNG supply deals with Qatargas I, Brunei LNG, Malaysia LNG Dua, Russia's Sakhalin LNG, as well as with Australia's Withnell Bay, Darwin, Pluto, Queensland Curtis LNG and Gorgon projects.

Its earliest contract, with Qatargas, expires in 2021. The latest one, with Gorgon, expires in 2039.

Reporting by Osamu Tsukimori and Aaron Sheldrick in Tokyo; Writing by Henning Gloystein; Editing by Richard Pullin and Joseph Radford


Copyright © 2016. All market data is provided by Barchart Market Data Solutions. Futures: at least 10 minute delayed. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  Cmegroupicon                                     Icelogo

FEATURED COLUMNS

Editorial comment
-Adrienne Blume
The ongoing development of shale gas resources in the US has spurred infrastructure construction for both natural gas processing capacity and LNG export terminals.
Regional focus
-Eugene Gerden
Russian natural gas monopoly Gazprom is strengthening its presence in the gas market of the Middle East through the planned construction of an 11-metric-MMtpy–12-metric-MMtpy LNG plant in Iran.


The New LNG Imperative

Register Now

The shale gas boom established the US as the world’s leading natural gas producer and is responsible for billions of dollars of investments in the US gas processing industry. Since 2012, the US has witnessed unprecedented growth in new gas processing capacity and infrastructure. This rise is due to greater production of domestic shale gas, which is providing cheap, available feedstock to fuel the domestic gas processing, LNG and petrochemical industries. New gas processing projects include the construction of billions of cubic feet per day of new cryogenic and gas processing capacity, NGL fractionators, multi-billion-dollar pipeline infrastructure projects, and the development of millions of tons per year of new LNG export terminal construction. Attend this webcast to hear from Lee Nichols, Editor/Associate Publisher, Hydrocarbon Processing, Scott Allgood, Director-Data Services, Energy Web Atlas and Peregrine Bush, Senior Cartographic Editor, Petroleum Economist as they discuss the future of LNG and the application of Energy Web Atlas, a web-based GIS platform which allows users to track real-time information for every LNG project.

November 29, 2017 10am CST

Register Now

 

Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2015 Gulf Publishing Company.