News Detail

<p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Japan&#39;s Chubu Electric Power Co said on Friday it will sign a preliminary deal with India&#39;s GAIL (GAIL.NS) as soon as possible to buy liquefied natural gas (LNG) together, the latest move by Asian buyers looking to cut prices for the fuel.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Rising demand for LNG in Asia, already the top destination for the fuel, has helped push its price to near-record levels and now buyers such as India and Japan are trying to find ways to cut their soaring gas import bills.</span></span></span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">India, Japan and other Asian countries that together import 70 percent of the world&#39;s LNG met in December to discuss forming a buyers&#39; club to get a better deal from suppliers.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">Asian prices are now more than four times the cost of natural gas in the United States, where a boom in shale oil and gas has sharply reduced prices.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Apart from joint purchases of LNG, Chubu and GAIL aim to explore cooperation in other areas such as shipping, Chubu President Akihisa Mizuno told reporters on Friday.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">Japanese Prime Minister Shinzo Abe is set to visit India on Saturday.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">A GAIL executive who did not wish to be identified said his firm is in talks with Japanese companies to buy LNG together but &quot;nothing has been firmed up yet&quot;.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">&quot;There is no memorandum of understanding contemplated at this stage with Chubu,&quot; the source said.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">India&#39;s oil secretary, Vivek Rae, said in December that India and Japan were planning to float joint tenders for LNG imports.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">Last week, it emerged that Japan&#39;s Tokyo Electric Power Co (Tepco) is proposing to rope in domestic and foreign companies to procure jointly up to 40 million tonnes a year of LNG.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Tepco&#39;s proposal was outlined in a business revival plan approved by Japan&#39;s government earlier this month.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">Asian importers say they are charged an excessive premium over other regions because of a practice of linking LNG contracts to oil prices. They also want more flexibility in contracts over ship destinations to free up the market.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">The buyers from China, South Korea, Japan, India and Taiwan were due to meet again sometime next month but the GAIL executive said that may be delayed.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">&quot;It looks difficult to have a meeting of major LNG buyers in February. We have not yet received the reports on demand,&quot; the executive said.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">During Abe&#39;s visit, Japanese trader Mitsui &amp; Co may expand its partnership with Oil and Natural Gas Corp (ONGC.NS) to consider joint acquisitions of upstream oil and gas stakes globally, an industry source in Japan said.&nbsp;</span></span></span><span style="color:rgb(105, 105, 105); font-family:arial; font-size:11px; line-height:1.6em">ONGC and Mitsui had signed a preliminary agreement to consider jointly buying LNG in August 2012.</span></p> <p style="text-align:justify"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source-On Request</span></span></span></p>