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 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.

Oct 22 (LNG) - Jerat Trading, the LNG and energy trading arm created by the merger of Jera Co. Inc. and French firm EDF Trading, has been assigned an “A” credit rating from the Japanese agency, Rating and Investment Inc. Jerat is now two-thirds owned by Jera Co. Inc. and EDF Trading holds one third of the shares. “R&I cites this rating as a reflection of the creditworthiness of the entire Jera Group, which is also rated ‘A’ with stable outlook,” said Jerat. Jera Co. Inc. itself was formed by the merging of the LNG procurement activities of the two largest Japanese utilities, Tokyo Electric Power Co. and Chubu Electric.