Tepco, Chubu to hold Japan's first joint LNG tender

[TOKYO] Tokyo Electric Power Co and Chubu Electric Power Co, two of the world's biggest buyers of liquefied natural gas (LNG), are holding an international tender for the fuel, one of the utilities said.

This is the first time two Japanese companies have jointly requested bids to supply LNG, a Tokyo Electric spokesman said, and the exercise is designed to reduce procurement costs that have risen as Japan has turned to the fuel to replace nuclear capacity shut down in the wake of the Fukushima crisis.

It is also unusual to hold a competitive tender because most LNG is supplied under long-term bilateral contracts between buyers and suppliers.

The companies sent out invitations for bids to about 60 LNG suppliers globally on Dec 12, the Tepco spokesman said. Bids are due by Friday and the utilities will decide on the suppliers in January.

He did not comment on the volumes sought or the price levels. The Nikkei newspaper reported earlier that the utilities were seeking several hundred thousand tons of LNG for delivery after April.

REUTERS