Tepco vows new rehab plan next month reflecting cost cuts, restarts


Tokyo Electric Power Co. plans to map out a new business reconstruction plan in late November, Jiji Press has learned.

The utility briefed creditor banks about the plan, sources said. Tepco’s present plan calls on it to return to profitability in the current business year to next March.

In the new plan, Tepco will increase the size of its cost cuts and show when it aims to restart reactors 6 and 7 at the Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture, the sources said.

Tepco has asked the Nuclear Regulation Authority for safety checks of the reactors under new regulatory safety standards.

Tepco plans to obtain fresh loans worth some ¥300 billion and refinance loans worth some ¥200 billion possibly in December. Banks are expected to accept additional loans after examining the new business plan, a step to ease concerns over the company’s financing.

For its reconstruction, Tepco has to assess how much it should bear in costs for decontamination and other measures in dealing with the meltdown disaster that started in 2011 at its Fukushima No. 1 plant.

The current business plan endorsed by the government in May 2012 does not state Tepco’s share of such costs, which may exceed ¥10 trillion, with the company unable to draw any concrete road map for its reconstruction.

Tepco is thus expected to accelerate negotiations with the government in order to show a certain course in the new plan, the sources said.

LNG project financing

Japan Petroleum Exploration Co. may seek some project financing for its $10 billion liquefied natural gas project in Canada from Japan Bank for International Cooperation, according to an official from the producer.

Japan’s second-biggest oil and gas explorer, known as Japex, acquired a stake in April in the Pacific Northwest Project, which plans to build an LNG plant in Prince Rupert, British Columbia, with a production capacity of 12 million metric tons a year.

“Given our 10 percent equity in the project, our investment could reach ¥100 billion or more,” Koichi Shimomura, who advises the president of Japex’s Americas and Russia project division, said at the World Energy Congress in Daegu, South Korea, Thursday. “As much as 50 percent of the total could be covered with the project finance.”

Japex purchased its stake in Pacific Northwest from Malaysian state-owned Petroliam Nasional Bhd., known as Petronas. It also bought 10 percent of a shale-gas field in the North Montney area of British Columbia in the same month.

Japex and Kuala Lumpur-based Petronas plan to complete a front-end engineering design study in early 2014 and reach a final investment decision by the end of that year, Shimomura said.

“Our priority is on the Pacific Northwest LNG Project,” he said at a briefing.

Japex is part of a Japanese consortium comprising Inpex Corp., Itochu Corp., and Marubeni Corp. that signed a memorandum of understanding with Russian state-owned Gazprom OAO in June to market in Japan LNG supplies from a project in Vladivostok.