Tepco to Buy U.S. LNG From Mitsui, Mitsubishi to Cut Fuel Costs
Tokyo Electric Power Co., Japanís biggest consumer of liquefied natural gas, plans to buy the fuel from the Cameron project in the U.S. through Mitsui & Co. and Mitsubishi Corp. to reduce its energy costs.
The company known as Tepco plans to buy at least 400,000 tons a year of LNG each from Mitsui and Mitsubishi at U.S. Henry Hub linked prices for 20 years from 2017, it said in a statement.
Japan paid 63,200 yen ($674) for a metric ton of LNG in November according to data from the countryís Ministry of Finance. Thatís equivalent to $15.31 per million British thermal units, compared with $3.43 for benchmark gas futures at Henry Hub in Louisiana.
Tepcoís fuel costs to run gas and other thermal plants will reach a record 2.81 trillion yen ($30 billion) this fiscal year as all of its nuclear reactors are offline because of the Fukushima atomic disaster in 2011. Projected prices for the liquefied fuel from North America are lower because of increased supplies of shale gas.