ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Business

Tepco, Chubu Electric to buy more Aussie LNG

Japanese venture seeks to cut shipping costs, flexibly adjust procurement

TOKYO -- The fuel supply joint venture between Tokyo Electric Power Co. Holdings and Chubu Electric Power will begin buying liquefied natural gas from the Wheatstone development project in Australia, diversifying its purchases amid tensions in the Middle East.

The fossil-fuel venture, known as Jera, gets more than 20% of its LNG from Qatar, its biggest supplier. But once operations at the Wheatstone project go into full swing in 2018, purchases from Australia will surpass those from the Middle Eastern nation. The Wheatstone site, located in northwestern Australia, is set to begin shipments as soon as this month.

Jera is among the world's top LNG purchasers, acquiring 35 million tons in fiscal 2016. Tepco and Chubu Electric handed over their long-term LNG contracts to the joint venture when it was established in 2015.

Shipping LNG from Australia typically takes about 10 days, roughly two-thirds of the time to ship from Qatar. In addition to lower shipping costs, the shorter distance means the Japanese venture will be able to adjust procurement flexibly depending on demand.

The Wheatstone project estimates annual capacity of 8.9 million tons, of which Jera will purchase 5.2 million tons to supply to Tepco and Chubu Electric. U.S.-based Chevron is leading the LNG enterprise. A 10% interest is held by PE Wheatstone, which is backed by Jera, Mitsubishi Corp.Nippon Yusen, and Japan Oil, Gas and Metals National Corp.

In June, Qatar's neighbors including Saudi Arabia severed ties with the nation. Although no major impact has been seen in LNG trading so far, the rise of such geopolitical risks is pushing companies to take preemptive measures.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more