Tokyo Electric Power Co. will buy more liquefied natural gas from Qatar Liquefied Gas Co., which is under the wing of the Middle East nation’s state-run oil firm.
Tepco said Monday it will buy 1 million tons of LNG annually under a contract with Qatar Liquefied Gas that covers the period from this August to December 2021.
The firm’s use of LNG as fuel for thermal power generation has shot up in the wake of the nuclear crisis at its Fukushima No. 1 power plant.
Tepco and seven other Japanese firms currently buy a total of 200,000 tons of LNG a year from the Qatari firm under their existing deal for the period from June 1999 to December 2021.
Tepco did not disclose the prices of LNG procurement under the latest deal. But company officials said that the prices are about the same or more advantageous to the power supplier than under recently concluded long-term contracts.
In fiscal 2011, Tepco used a record 22.88 million tons of LNG. It expects to use 23.27 million tons in fiscal 2012, which ends next March 31.
Ethylene output to be cut
Mitsubishi Chemical Corp. plans to cut its ethylene production capacity by about 30 percent and instead pour more resources into money-making, high-tech materials.
Mitsubishi Chemical said Monday it will shut down one of the two plants at its ethylene complex in Kamisu, Ibaraki Prefecture, in summer 2014 to reduce costs by about ¥4 billion.
There will be no layoffs as employees at the plant will be reassigned within the company, Mitsubishi Chemical said.
The company, a unit of Mitsubishi Chemical Holdings Corp., currently has two ethylene production facilities at the Kashima industrial complex and another at the Mizushima industrial complex in Kurashiki, Okayama Prefecture, with a combined output capacity of around 1.2 million tons per year. The plant to be halted in two years has an annual production capacity of about 340,000 tons of ethylene.
A fall in ethylene prices, due largely to steep production increases in China and the Middle East, has caused concern regarding the profitability of Japanese chemical makers.
The firm may also revise its production capacity at the Mizushima industrial complex it has been cooperating with Asahi Kasei Corp. since last year. Mitsubishi Chemical stopped ethylene production at its Yokkaichi plant in Mie Prefecture in 2001.