Tokyo Electric Power inks gas import agreement with Exxon
07 December 2009
After it signed the whopping $90-billion liquefied natural gas (LNG) import deal with Chevron Corporation on Saturday, (See: Chevron signs $90 billion gas deal with Tokyo Electric Power) Japan's largest utility Tokyo Electric Power Company (TEPCO) signed another LNG import deal with Exxon Mobil Corporation today.
Following the closure of the Kashiwazaki Kariwa nuclear power plant in 2007, which was the world's largest nuclear electricity generator, Japan has been importing most of it energy requirements and making use of natural gas for power generation.
A few days ago, ExxonMobil also concluded a gas supply deal with China Petroleum & Chemical Corp from its PNG LNG project in Papua New Guinea. On Saturday, the company secured $3-billion in funding for the $15 billion project from the US Export-Import Bank
Under the 20-year deal, Tokyo Electric will purchase approximately 1.8 million tons of LNG annually from the Texas-based Exxon Mobil's PNG LNG project in Papua New Guinea.
The PNG LNG Project has an annual supply capacity of approximately 6.6 million tons of LNG but both companies however, have not disclosed the financial terms of the agreement.
Tokyo Electric considers that the PNG LNG project is one of the most promising projects that is expected to start-up by the mid-2010s, and the overall terms and conditions of the agreement are attractive for both parties.
The PNG LNG Project is an integrated development which includes gas production and processing facilities, onshore and offshore pipelines and liquefaction facilities.
Exxon Mobil holds a 41-per cent stake in the PNG LNG project in Papua New Guinea, while Oil Search holds 34.0 per cent, Santos 17.7 per cent, Nippon Oil 5.4 per cent, Mineral Resources Development Company 1.2 per cent and Petromin PNG Holdings Limited 0.2 per cent.
Exxon and partners have yet to make a final investment decision on PNG LNG project, which is expected to make its first shipment in late 2013 or early 2014.
Tokyo Electric said that the PNG LNG Project will be the 11th LNG project from which it has procured LNG under long-term contracts, and will contribute to the diversification of Tokyo Electric's LNG supply sources.
Tokyo Electric, one of the world's largest electric utilities, imports around 20 million tons of LNG annually and with its 190 power plants, has generating capacity of approximately 62,000 MW, mainly through thermal, nuclear, and hydroelectric power sources.
It supplies power to 43.9 million customers in Tokyo, Yokohama, and the rest of the Kanto region.