Suppliers who mercilessly drive up prices

Breaking free of Atomic Energy at low cost

Japan should pursue a more MUTUALLY satisfactory business arrangement with the USA. The USA presently has a MASSIVE SURPLUS of Liquid Petroleum Gas (LPG) supplies. Butane, propane and the like can purchased, processed and transported, for much lower costs, than LNG to Japanese electrical utilities and for transportation fuels. The slight advantages of LNG are significantly outweighed by the LOW Cost and plentiful supplies of LPG. Chubu is unwittingly playing into the hands of merciless traders who are creating an artificial shortage of LNG. Japan can, and should make a better deal.

Saturday, Sep. 29, 2012 http://www.japantimes.co.jp/text/nn20120929f2.html

NAGOYA — Chubu Electric Power Co. is stepping up its drive to secure cheap and stable supplies of liquefied natural gas from the United States. Gas prices have been declining since the mid-2000s in the United States because the shale gas revolution has made vast amounts of gas available that were previously off limits to commercial production.

Utilities have stepped up LNG imports for their thermal power stations, which are running at high capacity nationwide to offset the loss of atomic power generation. On July 31, Chubu Electric signed a liquefaction deal with a subsidiary of Freeport LNG Development L.P., which runs an LNG terminal in Texas. Osaka Gas Co. is also party to the agreement. Under the deal, Chubu Electric will receive 2.2 million tons of LNG per year, equivalent to around 20 percent of its annual procurement needs. If domestic companies succeed in establishing a business model based on the procurement and liquefaction of gas in the U.S. for Japan, they may be able to seize the initiative from suppliers who have been mercilessly driving up prices.

Yuji Kakimi, an executive officer at Chubu Electric, stressed the importance of the Freeport LNG deal, describing it as "a new step" in efforts to enhance the nation's energy procurement program."We want to create a new chapter in the history" of Japan's energy industry, Kakimi said.