Tokyo Electric Power Co. (TEPCO), most known as the Japanese utility responsible for operating the tsunami-hit Fukushima nuclear power plant, revealed on Wednesday that it had secured deals to import 800,000 tons per year of liquefied natural gas (LNG) from the U.S. As part of an effort to cut costs on growing fossil fuel bills, TEPCO’s announcement comes just after energy advisors stated that massive savings could be made through cheaper imports from the U.S.
TEPCO’s deal involves buying 400,000 tons of LNG per year from Mitsui & Co trading house, along with the same amount from Mitsubishi Corp trading firm. Both deliveries will come from the U.S. Cameron liquefaction project to be operated in the state of Louisiana. The utility says it will import the U.S. LNG every year for a 20-year period, beginning in 2017. In Asia, the price of LNG is related to index prices for oil, making it much more expensive than that from North America, where its price is based on supply and demand.
A spokesman for the Japanese utility said that TEPCO has worked to secure 2 million tons per year of LNG from North America, including the 800,000 tons from Louisiana, which in turn will reduce fossil fuel costs by nearly 30%. As Japan is already the world’s largest importer of fossil fuels, a scenario intensified after the suspension of nuclear power following the Fukushima disaster, the Institute of Energy Economics Japan also said this week that the country could save roughly 600 billion yen (approx. $6.49 billion) by importing LNG from the U.S. TEPCO has not said how much its savings would be in actual yen or dollar amounts.
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