Japanese LNG player Tokyo Gas sets up UK subsidiary after investing in utility for Europe expansion

Monday, 04 January 2021
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Tokyo Gas, one of the world’s main and original LNG importers, has moved into UK market and set up a subsidiary to develop its European business while forming an alliance with British utility company Octopus Energy.

The Japanese utility said it had invested in Octopus Energy and would have positions on the board.

The Tokyo Gas LNG portfolio currently amounts to 14 million tonnes per annum and the utility controls a fleet of 10 ships to deliver to its four import terminals, three around Tokyo Bay and one at Hitachi in Ibaraki Prefecture.

Tokyo Gas said its initial investment in the UK utility would amount to 20 billion Japanese yen ($195 million).

The UK company of Tokyo Gas is called Tokyo Gas United Kingdom Ltd and would be headed by executive Hajime Nakamura.

“The UK unit will investment in energy businesses in Europe,” said a Tokyo Gas statement.

Tokyo Gas is Japan’s second-largest LNG importer after the Jera Co. Inc. joint venture of Tokyo Electric Power Co. and Chubu Electric.

“In January 2021, in addition to establishing a subsidiary in the United Kingdom, Tokyo Gas also plans to sign agreements concerning the investment in Octopus Energy and the establishment of a joint venture company in Japan,” explained Tokyo Gas.

“The joint venture in Japan is scheduled for establishment in February 2021 and is slated to start operations in autumn of the same year,” it added.

Tokyo Gas said that Octopus Energy was a rapidly growing utility that possesses expertise in digital technology and electricity retailing and in four years had secured a large chunk of the UK market for sales of natural gas and power.

“Its sale of electricity is 100 percent from renewable sources and the gas sold to consumers is offset for carbon-dioxide emissions,” added Tokyo Gas.

Tokyo Gas built its own domestic business in the modern era by being the first company to introduce LNG to Japan from Alaska in 1969.

It constructed LNG receiving terminals, connected to main circular and subsea trunk pipelines, and in under 20 years had developed a city-gas business comprising 5.5 million.

London-based Octopus pitches itself as a green energy supplier and has signed up 1.8 million customers via its own brand, and by running other utility firms started by UK retailers such as Co-op Energy and M&S Energy.

“Were thrilled that Tokyo Gas, one of Japan’s most respected utilities, with 135 years of heritage, is partnering with Octopus to launch Octopus Energy in Japan, and on top of that will invest about $200M for a 9.7 percent stake in Octopus Energy Group to help drive our global renewables mission faster,” stated CEO Jackson.

“In addition, existing investor, Origin Energy (Australia), will invest an additional $47M, taking the total new investment to almost quarter of a billion dollars, and values Octopus Energy at over $2 billion,” added Jackson.

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