Tokyo Electric Power to operate second LNG carrier

Jspan's Tokyo Electric Power Co Inc (Tepco), the world?s largest LNG importer, said it would build a second liquefied natural gas tanker by 2006.

Following the blueprint of a similar ship planned for 2003 completion, the 135,000 cubic meters Moss-type ship will be built at Mitsubishi Heavy?s Koyagi Works in Nagasaki.

The Japanese utility will hold a 70 percent share in the Bahamian ownership vehicle.

Other shareholders include Mitsubishi Corp, with 20 percent, while NYK Line will hold a 10 percent share and also manage the ship.

With this deal, NYK Line and its subsidiaries will have ownership or provide ship-management services for a total number of 32 LNG vessels.

In 2000, Tepco became the first Japanese utility to get into LNG vessel ownership following the example of major gas importers.

The ownership and management for Tepco's latest two vessels will be the same.

A Tepco spokesman declined to give an exact construction cost, but said an LNG tanker of that class generally cost about YEN20bn ($151.3m) or less.

Tepco buys 16m tonnes of LNG each year from seven different projects and at present ships the cargoes to Japan using 46 tankers operated by other firms. To date, Tepco has purchased the LNG from six of the seven projects on an ex-ship basis.

Tepco said it planned to step up purchases of LNG on a fob basis in a bid to cut costs and increase flexibility.

To date, the only fob shipment method is from Indonesia, while the ship ordered in late 2000 would handle shipments from Malaysia. (*)