Tokyo Gas, Showa Shell to Add Gas-Fired Unit at Ohgishima Plant

Tokyo Gas Co. (9531) and Showa Shell Sekiyu K.K. (5002) will build an additional natural gas-fired unit at the Ohgishima plant near Tokyo.

Ohgishima Power Co., a joint venture between the two companies, both based in Tokyo, will install the 407-megawatt thermal facility at the plant, which currently has two gas-fired units with a combined capacity of 814.2 megawatts, in the Kanagawa prefecture, south of Tokyo, the companies said today in a joint statement.

Tokyo Gas plans to increase its electricity output to as much as 5,000 megawatts by 2020 from 2,000 megawatts last year, it said in its long-term business plan announced in November. The importance of thermal-power generation will increase in Japan’s energy mix as the country aims to phase out nuclear power by the decade ending 2039 and as renewable energy is still expensive and often unstable, the government said in September.

The two companies may invest as much as 40 billion yen ($511 million) to build the No. 3 Ohgishima unit, the Nikkei newspaper reported Oct. 6, without saying how it obtained the information. Shin Shizukuishi, general manager of Tokyo Gas’s total energy business department, declined to comment on the project cost at a news conference today.

Tokyo Gas owns 75 percent stake in the joint venture Ohgishima Power with Showa Shell holding the rest.

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net; Peter Langan at plangan@bloomberg.net

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