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Tokyo Gas President Uchida:
= He plans to seek flexibility in terms as well as procurement sources =
Takashi Uchida, President of Japan's Tokyo Gas, expressed his wishes in the press conference on 11th, "We would like to try new LNG contracts." The Japanese company, which has decided to purchase Canadian LNG jointly with European companies, is seeking not just flexible procurement sources but also flexible contract terms. He commented, "If we buy additional LNG, we would like to pursue more flexible contract terms."

Tokyo Gas announced its plan to purchase LNG from Mozambique together with UK-based Centrica in this June. This will be the first LNG purchase from Mozambique and also the first LNG co-procurement with European company. President Uchida commented on the contract, "We cannot reveal details on this, but we are grateful if you could imagine, in view of co-procurement with European company, a wide variety of terms is included in the contract," implying a possibility of realization of new LNG contract.

He also told on the Canada LNG project, the Company recently signed an HOA for it: "This (contract) will be Henry Hub-linked pricing we guess, but there is a gas hub called AECO in Canada," showing his plan to establish new price formula including the price in Canada market.

The Company started long-term LNG procurement from the Cove Point Terminal in the US this May, which is the first long-term purchase contract in the recent seven years since procurement from Alaska that ended in 2011. Consequentially, its LNG procurement sources are expanded, ranging from Malaysia, Australia to the US.

The contract with the Cove Point project includes Henry Hub-linked pricing. With the contract with the Cameron LNG project, which is also Henry Hub-linked, Tokyo Gas procures a total of 0.72 mtpa of LNG from the two US projects.

In addition, Mozambique and Canada are added in its procurement sources. It plans to co-procure about 2.6 mtpa of LNG from Mozambique jointly with Centrica and about 0.6 mtpa from Canada.

Meanwhile, Uchida said: "We have secured almost enough volume for the 2020s." As the Company cannot purchase LNG so much anymore and in consideration of its hope to seek unprecedented LNG contracts, he responded to a question from a writer on Japan-US Trade talks: "At this point, we have no plan to procure additional LNG from the US after the contract with the Cameron project."

In the press conference, a question on US-China trade war's impacts on LNG procurement also arose. Mr. Uchida expressed his view on this: "Most LNG transactions in the world are long-term based, so this matter will have less impact on global LNG procurement situation as long as contracts are carried out with no problems," and added spot prices might rise as China might increase spot LNG but the impacts would be limited because the US-China long-term contracts were quite unlikely to be cancelled right now.
last modified : Fri 19 Oct, 2018 [10:28]
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