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Business

Tokyo Gas to take stake in planned US shale gas plant

Seeking know-how from abroad to compete back in Japan

TOKYO -- Regional Japanese utility Tokyo Gas will join a shale gas power plant project in the U.S., gaining a valuable foothold there as well as expertise to use in its competitive home market.

Tokyo Gas will spend billions of yen, or tens of millions of dollars, for 33% of the Birdsboro Power plant being built in the state of Pennsylvania by a regional energy company. Operation is slated to begin in the spring of 2019, with a generating capacity close to 500,000kW. Costs are expected to total roughly $500 million.

The power station would enjoy a stable supply of fuel from shale gas mined nearby. Japanese trading house Sojitz has already taken a stake in the project.

Tokyo Gas will take the opportunity to dispatch personnel to the plant. It intends to participate at every level of the project starting from construction, acquiring know-how to use in its domestic power business.

The utility has already invested in a natural-gas-fired plant in New York state and acquired an interest in a Texas shale gas field. It sees North American operations as equal in importance to those in Southeast Asia and is investing accordingly. At home, Tokyo Gas faces sluggish growth in energy demand and stiff competition amid the liberalization of the retail market. Kansai Electric Power and Osaka Gas have invested in American plants as well.

Donald Trump's rise to the presidency has fueled expectations of stepped-up resource development and infrastructure construction in the U.S. Corporate Japan could expand even further there, depending on the progress of bilateral economic talks set to begin Tuesday.

(Nikkei)

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