Tohoku Electric Power Company will import LNG from Peru for the first time at the end of February, which it has procured on spot basis to cope with demand for electricity in winter season.
The LNG carrier Valencia Knutsen with carrying capacity of 173,400 cubic meters, that left Pampa Melchorita, in Peru, is currently heading for Higashiniigata LNG terminal located on Japan Sea side of Japan.
So far, four electric power companies in Japan such as Tokyo Electric Power Company, Chubu Electric Power Company, Kansai Electric Power Company and Kyushu Electric Power Company have imported LNG from Peru. Tohoku Electric will the fifth Japanese LNG buyer.
The company has made up for the shortage of power supply by thermal power generation, which was caused by the shutdown of nuclear power plants. Also, it has been working on installation of emergency power supply equipments such as gas turbines at Higashiniigata and Niigata thermal power station. On January 31st 2012, Niigata Thermal Power Station Unit 6, having output power of 34,000 KW, started commercial operations.
Furthermore, Tohoku Electric has expedited restoration work for 446,00 KW No 4 unit at the Sendai LNG fired thermal power plant, which was hit by the tsunami and plans to shift the trail operations to commercial ones in early February 2012, which is one month ahead of schedule.
In order to cover the necessary fuel for these power generation, the company has concluded long term contracts with Malaysia, Australia and Russia and short term on with Qatargas to buy monthly one or two cargoes for a year from August 2011. Besides these contracts, it has procured one cargo per month on spot basis.
Incidentally, Tohoku Electric is expected to receive LNG from Tangguh, Indonesia this Spring, with which it has long term contract. The contract volume is 120,000 tonnes in two cargoes, which is small. The company initially planned to receive the cargoes this winter and summer when the electricity demand will grow. However, its receipt this winter was cancelled on account of the operational schedule at Higashiniigata Terminal.
On the other hand, Wakaba Maru, which Tohoku Electric started to periodically charter around May 2011, is expected to be returned to Mitsui OSK Line at the end of the one year contract. The vessel has originally been chartered by Tohoku Electric to carry LNG from Indonesia on FOB basis in anticipation of continuing supply. However, as the LNG supply discontinued, Wakaba Maru has currently been re chartered to Korea Gas Corporation.
(Sourced from TEX Report Limited)
