Tokyo Gas to build fourth LNG terminal in Japan

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 3 -- Tokyo Gas Co., which currently operates three LNG regasification terminals in Japan, has selected the coastal city of Hitachi in Ibaraki prefecture as the site for its fourth facility, the firm's first in 20 years.

Tokyo Gas, which operates two LNG receiving facilities in the Yokohama area and one in Sodegaura, will spend some 100 billion yen on the Hitachi facility, which will include docks for tankers, storage tanks, and regasification equipment.

The new terminal is scheduled to start operations in 2017-18, but the firm released no information on its size or its sources of supply.

Generally, the new terminal is expected to help meet the long-term growth in demand from industry as Tokyo Gas' industrial gas sales have been rising at an average of 7%/year since 2003-04 and now account for about 40% of all its gas sales.

More precisely, the decision—announced by Tokyo Gas president Mitsunori Torihara—follows earlier efforts by the firm to increase its supply of gas to the Hitachi region.

In 2007, Tokyo Gas said it would supply Hitachi Ltd.'s power station in the city with natural gas from July through a new satellite LNG terminal in Ibaraki prefecture—a move aimed at expanding the company's natural gas user base to include areas that lack gas pipelines.

A Tokyo Gas spokesman said the firm would deliver LNG to the satellite terminal by truck from its main Sodegaura LNG terminal in adjacent Chiba prefecture before regasifying the LNG and selling it in Hitachi.

Tokyo Gas plans to provide 50,000 tonnes/year of gas to the power station and expects to double the volume by developing new customers in the area, the spokesman said.

The Ibaraki satellite terminal, which has a 2,400-kl tank and three 7.5-tonne/hr regasification units, is the company's second satellite LNG terminal—the first was also built in Ibaraki prefecture in April 2006, with two 400-kl tanks.

Short-term sales down
This week's announcement of the new regasification terminal at Hitachi comes despite figures announced by Tokyo Gas this month showing a slight dip in its recent sales of natural gas.

Total gas sales volume by Tokyo Gas for December 2008 came to about 1.169 billion cu m, down 112.08 million cu m from the same period last year.

Sales of residential gas totaled 326.9 million cu m, down 8.7% from December 2007 due to fewer counted days and higher temperatures, which caused a heating and boiling water demand decrease.

Commercial, public, and medical use volumes totaled 210.3 million cu m, down 7.4% from last year due to fewer counted days and higher temperature days from that of the previous year, which caused heating demand decrease.

Although industrial use represents a larger percentage of Tokyo Gas' sales, recent demand totaled about 442.95 million cu m, down 11.5% from last year as existing customers use less.

Volumes for wholesale supply to other gas companies totaled 189.3 million cu m, down 3.5% from last year. Wholesale gas suppliers sold less to high-volume customers.

On a cumulative basis, Tokyo Gas said, gas volumes from April through December 2008 totaled 986.2 million cu m, a decrease of 0.1% vs. the same period in 2007.

Contact Eric Watkins at hippalus@yahoo.com.

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