Nippon Mitsubishi, Chugoku Electric may build LNG import plant

Chugoku Electric Power Co., a power utility based in western Japan, said it will build an import facility for liquefied natural gas, probably with Nippon Mitsubishi Oil Corp., to expand its gas supply business.

Chugoku, Japan's No. 6 power company by market value, plans to build a plant capable of receiving more than 1.2 million tons of LNG a year within its service area, to supply large users and take advantage of deregulation, said Shigeo Kasami, a Chugoku spokesman.

``We will move ahead with the plan to have another LNG base as early as possible,'' Kasami said, adding it will cost ``tens of billions of yen.'' No construction date was given.

Chugoku and Nippon Mitsubishi will invest as much as 50 billion yen ($42 million) to build a plant which turns LNG into gas within Nippon Mitsubishi's oil refinery in Okayama Prefecture, Nikkei English News said, without citing sources.

Nippon Mitsubishi is a possible partner because it can offer a construction site within its refinery in Okayama Prefecture as well as natural gas it will produce overseas, said Kasami. Nippon Mitsubishi officials were not available for comment.

Nippon Mitsubishi, which is due to start producing natural gas in Malaysia and Indonesia after 2003, is seeking to expand Japan's domestic market for gas. It plans to sell gas to factories and other big users with affiliate Teikoku Oil Co.

Chugoku sells as much as 100,000 tons of natural gas a year to Yamaguchi Gohdoh Gas Co., a city gas provider, from a 1.2 million ton per year LNG plant in Yamaguchi Prefecture, on the western tip of the central Honshu island.

Supplying gas to other city gas companies and large users will require Chugoku to build the second LNG plant, Kasami said.

Chugoku shares fell as much as 1 yen, or 1.1 percent to 1,571. Nippon Mitsubishi shares rose as much as 3 yen, or 0.6 percent, to 513. (*)