Japan’s utility Osaka Gas plans to increase the resale of liquefied natural gas (LNG) to 3 million tons per year by 2020.
Speaking to reporters Osaka Gas president Takehiro Honjo said the company is targeting annual trading volumes of around 10 million tons on mid to long-term with 3 mtpa dedicated for resale, Reuters reports.
The decision comes following Japan’s Fair Trade Commission’s ruling that destination clauses in LNG supply deals are restricting competition.
These clauses restricted buyers to resell surplus volumes, however, the suppliers have turned more flexible over recent years under pressure from buyers seeking abolition of the destination clauses.
In the financial year ending March 30, 2017, the utility, that has been selling LNG since 2006, sold 1.1 million tons of the chilled fuel.
The initial target for this year was to sell 2.5 million tons of LNG, however, with suppliers allowing for renegotiation of the destination terms, and new volumes emerging with no destination clauses, the company boosted its resale volume to 3 mtpa.
Osaka Gas has booked volumes at the Freeport LNG project in the United States that will start production in 2018. The 20-year tolling agreement for 2.3 million tons of LNG has no destination clause and Osaka Gas expects such contracts to make up 40 percent of its overall portfolio by 2020.
To handle the additional volumes and increase the portion of LNG it transports onboard its own vessels, Osaka Gas plans to add at least one LNG carrier to its eight-carrier fleet by 2020.
LNG World News Staff