TOKYO, March 24 Japan's Chubu Electric Power said on Monday it has signed a deal with India's GAIL to consider cooperation in joint procurement of liquefied natural gas (LNG), as Asian buyers look for stable and lower prices of the fuel.
Rising demand for LNG in Asia, already the top destination for the fuel, has helped push its price to near-record levels and now buyers such as India, Japan and South Korea are trying to find ways to cut their soaring gas import bills.
The two firms had been considering a preliminary deal on joint purchases since January. India, Japan and other Asian countries that together import 70 percent of the world's LNG met in December to discuss forming a buyers' club to get a better deal from suppliers.
State-run Korea Gas Corp (KOGAS) and a Japanese company bought natural gas jointly on Monday and such cooperative purchases will become more common, the head of state-run Japan Oil, Gas and Metals National Corp (JOGMEC) said.
Asian prices LNG-AS are at least three times the cost of natural gas in the United States, where a boom in shale oil and gas has sharply reduced prices.
Asian importers say they are charged an excessive premium over other regions because of a practice of linking LNG contracts to oil prices. They also want more flexibility in contracts over ship destinations to free up the market. (Reporting by Osamu Tsukimori; Editing by Muralikumar Anantharaman)