Japan’s JX to Buy 60,000 Tons of LNG in Spot Market
JX Nippon Oil & Energy Corp said on Friday it would buy 60,000 tons of liquefied natural gas (LNG) on the spot market, aiming to expand sales in a domestic market shifting away from costlier and more polluting oil.
This would be the second attempt by JX Nippon Oil, Japan’s top refiner, to buy LNG via a spot contract. Its first purchase was earlier this year, moving into a market dominated by power and gas utilities.
In April, it imported 60,000 tons of LNG from Nigeria, taking the delivery at its only import terminal in Mizushima, western Japan, which is jointly operated with Chugoku Electric Power Co, a company spokesman said.
JX Nippon Oil plans to start operation of a new LNG import terminal in Hachinohe, northern Japan, in April 2015, where it aims to take in about 700,000 tons of LNG a year.The company has already signed long-term LNG contracts starting from 2015 to import 300,000 tons a year from Australia’s Gorgon LNG project operated by Chevron and 200,000 tons a year from Shell Eastern Trading.
The spokesman declined to comment on prices or pricing strategies.
In Asia, LNG is usually bought on long-term contracts with prices linked to oil rates to ensure stable supply. But some users are looking for flexibility in pricing given additional supplies due partly to a fall in U.S. LNG imports and extra need from Japanese utilities because of a nationwide safety shutdown of nuclear plants after last year’s Fukushima disaster.