By Yuka Obayashi
TOKYO (Reuters) -JERA, Japan’s biggest buyer of liquefied natural gas, and Saibu Gas Holdings will collaborate on the use of the Hibiki LNG Terminal, they said on Tuesday, to improve domestic fuel procurement and develop their global business.
Saibu Gas, a city gas provider based in Japan’s southern island of Kyushu, decided last November to expand capacity at the terminal, including through the construction of a third LNG storage tank with a capacity of 230,000 kilolitres.
Under the agreement announced on Tuesday, JERA, Japan’s biggest power generator, will be allowed access to the new tank, improving its flexibility to respond to more volatile supply and demand caused by increased use of renewable energy and by seasonal fluctuations in consumption.
For Saibu Gas, sharing the tank, which is scheduled to come online in 2029, can also improve profitability and will provide lease income. The companies did not give financial details, citing confidentiality requirements.
“The partnership with JERA is a major step forward not only for improving the efficiency of the Hibiki Terminal, but also for advancing our overall energy business,” Saibu Gas President Takuji Kato told reporters.
Both companies hope to leverage the terminal’s strategic location to expand their business across Asia and globally, while also exploring next-generation fuels, such as hydrogen.
Naoto Tanaka, JERA’s senior vice president, said in future, joint LNG procurement could be considered.
JERA operates eight LNG receiving terminals with a total tank storage capacity of 6.57 million kilolitres. Saibu Gas operates one terminal with 360,000 kilolitres of storage.
(Reporting by Yuka Obayashi; editing by Barbara Lewis)
