Tepco Allocates 40 Billion Yen to Switch Terminals to Lean LNG

Tokyo Electric Power Co., Japan’s biggest consumer of liquefied natural gas, will spend 40 billion yen ($430 million) to convert two LNG terminals at Tokyo Bay to receive natural gas with a lower heat content.

The company known as Tepco will switch two sites at Futtsu and Higashi Ohgishima to take a total of 9 million metric tons a year of so-called lean LNG, Toshiaki Koizumi, general manager of the utility’s fuels department, said yesterday by phone.

Lean natural gas has a lower heat content than because it contains a higher proportion of methane. North Asian consumers such as Japan usually buy higher-energy LNG from Indonesia and Malaysia which has ethane molecules in addition to methane.

The Futtsu terminal will add two 125,000 cubic-meter storage tanks for lean LNG by 2017, Koizumi said. Work will begin the same year on converting the Higashi Ohgishima site and finish in 10 years. Futtsu will still be able to accept rich LNG after 2017, and the natural gas will be mixed before being shipped through pipelines, he said.

Tepco plans to buy LNG from Sempra Energy’s Cameron LNG project in Louisiana, it said this week. The utility may purchase at least 400,000 tons a year of LNG through both Mitsui & Co. and Mitsubishi Corp. for 20 years from 2017, it said in a Feb. 6 statement. The fuel will be produced from shale gas which has more methane.

To contact the reporter on this story: Chou Hui Hong in Singapore at chong43@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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