Tohoku Electric to tie-up with Korea Gas on LNG

Japan's Tohoku Electric Power Co has reached agreement to tie-up with Korea Gas Corp on liquefied natural gas procurement, a Tohoku spokesman was quoted by Platts as saying on Monday.

Long-term LNG contracts usually require stable monthly purchases by buyers even in the low demands.

Tohoku's demand for LNG is at its peak in the summer due to higher air conditioning use, while Kogas demand peaks in the winter for heating usage.

The tie-up could level both companies' seasonal LNG demand gap, the spokesman said.

Tohoku currently imports 4-million metric tons per year of LNG, while 3-million metric tons per year comes from Indonesia's Arun project though supply from Arun was halted briefly in 2001 because of violence in the area.

Meanwhile, Tohoku's 524,000-kilowatts nuclear power unit has been shut since September 2002 due to cracks discovered in the reactor, raising demand for alternative fuel. (*)