Tepco considers buying North American shale gas: Nikkei

Fri Jun 1, 2012 3:02pm EDT

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(Reuters) - Tokyo Electric Power Co (Tepco) (9501.T), the owner of the Fukushima nuclear plant, is considering buying North American shale gas from 2016 as it looks to lower fuel costs, Japanese business daily the Nikkei reported.

Tepco reckons it can buy shale gas at half the price of liquefied natural gas (LNG) it now uses, allowing it to save fuel costs, the newspaper said.

The utility is using more LNG as fossil fuels fill the void left by nuclear capacity taken offline after the March 2011 earthquake and tsunami.

Tepco is expected to present its ideas on Monday to a Ministry of Economy, Trade and Industry (METI) panel, which screens power-rate increase proposals, the Nikkei said.

The utility has asked METI to approve a proposed household rate hike to take effect in July, despite opposition from consumers, the business daily reported.

Japan would need U.S. Department of Energy authorization for Tepco to import shale gas, in the absence of a free trade agreement, the Nikkei said.

(Reporting by Neha Alawadhi in Bangalore; Editing by Viraj Nair)

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