Regional LNG: TEPCO, Kansai Elec to strike out on own in LNG procurement: Report

Tokyo Electric Power Co (TEPCO) and Kansai Electric Power Co plan to procure liquefied natural gas (LNG) on their own in lieu of the current joint procurement by eight domestic power and gas companies, the Nihon Keizai Shimbun reported over the weekend.

This would give the two firms greater flexibility in increasing or decreasing the amount of LNG procured, making it easier to adjust output at power plants that use the fuel, the newspaper noted.

The two power providers -- along with Chubu Electric Power Co, Kyushu Electric Power Co, Chugoku Electric Power Co, Tokyo Gas Co, Osaka Gas Co and Toho Gas Co -- jointly import a total of 7.3 million tons of LNG a year, slightly more than 10 percent of demand in all of Japan.

Through a 20-year deal that started in 1989, they obtain this fuel from an LNG production base in western Australia that is operated by BP Plc and others.

Kansai Electric recently signed an exclusive deal ahead of the scheduled renewal of the current joint procurement deal in 2009. TEPCO is also negotiating an exclusive contract, the report said, adding that the other power and gas companies may follow suit. (*)