Tohoku to cut LNG imports from RI

Tohoku to cut LNG imports from RI

Dow Jones, Tokyo

Japan's Tohoku Electric Power Co. plans to reduce its liquefied natural gas imports 31.4 percent by 2005, as it is scrapping several of its outmoded thermal power plants.

Tohoku Electric expects to cut its LNG imports to 2.77 million metric tons in 2005 from its import estimate for this year at 4.04 million tons, a company spokesman said on Thursday.

The intention to slash LNG imports comes as Tohoku Electric plans to mothball several of its old thermal power plants, and start up operations at a newly built nuclear power reactor in Aomori Prefecture, northern Japan, the spokesman said.

In July 2005, the power utility will begin commercial operations at a 1.1 million-kilowatt reactor at its Higashi-Dori Power Station in Aomori.

"The nuclear reactor will be the largest unit (in terms of capacity) in our power generation plants," the spokesman added.

To reduce its LNG imports, Tohoku Electric has decided to cut its import volumes from Indonesia through a long-term contract with Pertamina, and shorten the contract period.

Under the new five-year deal with Pertamina starting 2005, Tohoku Electric will receive 830,000 metric tons of LNG a year.

The current 20-year contract with Pertamina has provided Tohoku Electric with 3 million tons of LNG annually. The existing 20-year deal expires December 2004.

The spokesman said the cuts in imports from Indonesia were partly due to Tohoku Electric's recent measures to diversify its LNG import sources.

From 2005 onward, Tohoku Electric will be importing annually 2.77 million tons of LNG. Of this amount, 830,000 metric tons are from Indonesia, 540,000 metric tons from Qatar, 1 million tons from Malaysia, and 400,000 tons from West Australia.

Currently, Tohoku Electric has the capacity to generate 16 million KW of electricity, of which 11 million KW are produced through thermal generation. About 25 percent of the company's power output comes from gas.

By 2007, Tohoku Electric will lessen its reliance on gas-fired power generation to the 22 percent level, and raise nuclear power output to a level equivalent to 31 percent of total output from the current 22 percent, he added.