LNG

JERA Co Inc., the largest Japanese liquefied natural gas buyer and power assets owner, said it was overhauling its business while increasing its medium-term LNG activities with a larger carrier fleet as it aimed for 3.6 trillion yen ($33 billion) of sales in fiscal 2019.

The company said it now had volumes of LNG amounting to 35 million tonnes per annum, upstream investments in five projects and was increasing its LNG fleet from 18 vessels to 25 to ship its cargoes.

However, while LNG activities would focus on growth through 2030, after that date Japan’s needs for power generation could be different.

For its power generation arm of Tokyo Electric Power and Chubu Electric, JERA controls domestic power capacity of 67 gigawatts and a total of nine gigawatts of overseas output.

JERA said the direction was uncertain for Japan’s future power mix, though by 2030 it could have 20-22 percent nuclear power units in operation, 24-22 percent made up of renewable energy projects, 27 percent gas-fired plants supplied with regasified LNG, 26 percent coal-fired plants and 3 percent oil-fired plants.

Under the transition, Japan could replace more plants requiring LNG with renewable projects than other generating facilities, leading to a possible future decrease in LNG imports of around 14 percent after 2030.

The 2030 energy mix numbers differ significantly from the 2016 figures of 16 percent nuclear, 41 percent gas-fired plants using LNG, 33 percent coal and 10 percent oil.

“Population shrinkage and sluggish demand means that a constant growth of domestic demand for electricity can’t be expected in the future,” according to JERA.

Its figures suggest the Japanese population could drop to 93 million people by 2060 from 128 million at present.

JERA explained that its company structure would now comprise three separate departments overseeing the five main sectors of its business, fuel markets, fuel procurement, power plants, electricity sales and the domestic electricity market.

JERA said the role of its “Optimization Department” would assume greater importance in the future.

“It will be responsible for increasing profits through operational excellence in power plants and fuel terminals, as well as market trading of fuel, electricity and gas, based on the existing agreements,” said the company.

The company’s “Business Development Department” would also have a key role.

“It would increase returns by achieving the optimal asset portfolio through new installations and the replacement and restructuring of power plants,” added the company.

JERA’s “Operations & Maintenance Department” would be responsible for boosting returns by achieving high value-added services through “agile operations and cost reductions” in utilizing its infrastructure.

The company said it would use LNG and renewables to spark the transition to a clean-energy economy up to 2025.

“Through enhancing the LNG value chain and undertaking large-scale renewable energy development and constructing a complementary relationship between LNG-fired power and renewables, JERA will provide stable, economic and clean energy,” stated the company.

JERA said it would also implement “six measures” to achieve its strategy goals and to be a world leader in LNG and renewables.

“For LNG, we would maintain and expand our fuel procurement scale through replacement of domestic power plants with more efficient facilities and with expansion of generation,” it explained.

“We would leverage that scale for LNG trading expansion and upstream project participation and improve profitability along the entire value chain,” JERA added.

“For renewable energy, we would leverage our large-scale project development competence that we gained from the existing projects, promote development focusing on offshore wind power in particular, and grow it as one of the main pillars of the business in our future portfolio,” stated the company.

Jera Trading (Jerat), the joint trading venture between Japanese LNG and fuel procurement and utility company Jera Co. Inc. and French firm EDF Trading established in April 2017 following the acquisition of EDFT’s coal business, is continuing its countdown to becoming Jera Global Markets.

Jerat is strengthening its team by hiring a senior trader from global commodities firm Vitol.

Jerat said Alex Baileff would join the company in April as Senior Vice President for Coal.

“We are looking forward to welcoming Alex to Jera Trading. He brings with him a wealth of knowledge and trading experience which will be an asset to our coal and freight activities as we develop Jerat’s global footprint,” said Sunao Nakamura, Chairman of the Board of Jera Trading.

Jera and EDF Trading signed an agreement last year to form an LNG optimization and trading joint venture whereby Jera’s and EDFT’s LNG trading activities would be merged into Jerat, which will be renamed Jera Global Markets.

This agreement is expected to be completed in early 2019. Baileff will join Jerat’s senior team comprising Kazunori Kasai, Chief Executive; Robert Quick, Director of Corporate Affairs; Hisaki Endo, Director of Group Coordination; Ronan Lory, Chief Operating Officer; and Sarah Behbehani, senior Vice President of LNG.

Jera Co. Inc is the main company in all the operations. It was set up by Tokyo Electric Power Co and Chubu Electric to combine their LNG and other trading activities and ultimately to run their power businesses as the industry in Japan reformed and was deregulated.

On the trading front, the new Jera Global Markets will have more than 300 people and offices in Japan, Singapore, the UK, the US and the Netherlands, Jerat will become one of the largest utility-owned seaborne energy optimizers, spanning Asia, the Pacific and the Atlantic Basins.

The two firms noted that as the demand for LNG in Japan becoming increasingly variable and difficult to predict and with the ramp-up in US liquefaction and exports, Europe has become a key balancing market for excess global LNG.

Jera and EDFT have said there is significant room for optimizing LNG on a global basis, establishing a more liquid market, and over time developing a clear pricing signal for LNG in Asia.

Jera Co. Inc. holds 66.67 percent of the equity in Jerat through its wholly-owned subsidiary Jera Trading International while the French firm holds 33.33 percent of the Jerat shares.

Jera Co Inc. of Japan, already the nation’s largest LNG importer, will become Japan's biggest power generation company when it assumes the domestic power  businesses of Tokyo Electric Power Co. and Chubu Electric Power Co. in April 2019, giving it control of about half of Japan's power market.

Jera Co. Inc., the largest Japanese liquefied natural gas importer with around 40 million tonnes per annum of requirements, said it was still replacing ageing oil-fired thermal power plants in Japan with coal-fired units instead of gas for economic reasons.

Oct 30 (LNGJ) - Chubu Electric Power Co., whose LNG procurement is handled by Jera Co Inc., a joint venture with Tokyo Electric Power Co., has merged its own regional domestic power and gas subsidiaries to better adapt to the deregulated Japanese market. Chubu Electric Power and Chubu Gas have formed a new company called CS Energy Services to be based in Toyohashi City in Aichi Prefecture. “CS Energy Services will fully harness the business foundation and management resources that Chubu Electric and Chubu Gas have garnered to provide competitive gas and electricity bundled plans based on a framework of security and stable supply,” said Chubu. CS Energy will particularly target corporate customers in the Higashi Mikawa region in Aichi Prefecture and the Seien region in Shizuoka Prefecture.

US regulators have approved commissioning of the first Train at the Freeport liquefied natural gas export plant at Quintana Island in Texas, further boosting Gulf Coast production prospects.

Japanese LNG and energy procurement company Jera Co. Inc., formed by Tokyo Electric Power Co. and Chubu Electric, has signed a binding agreement with French firm EDF Trading Ltd to form an LNG and trading joint venture.

Australian Industrial Energy, part of the Minderoo Group investment and mining company, has advanced with plans for the first Australian liquefied natural gas import terminal with Japanese partners, including the choice of location.

Japanese companies Marubeni Corp. and Jera Co. Inc. have joined an Australian investment and energy group to reveal plans for a liquefied natural gas import facility near Sydney to make up the domestic natural gas shortfall on the East Coast.

Jera Co. Inc., the Japanese liquefied natural gas procurement company set up by Tokyo Electric Power Co and Chubu Electric, has signed an agreement to cooperate on LNG with European company EDF Trading, a subsidiary of Electricite de France, and which may lead to a full LNG business merger.