TOKYO, Feb 27 (Reuters) - Two of Japan’s biggest natural gas users, Tokyo Electric Power Co and Tokyo Gas Co , said on Wednesday they had separately agreed with Astomos Energy Corp to buy U.S. liquefied petroleum gas from this year to cut fuel costs.
For the first time, the pricing will be based on U.S. propane prices, a benchmark for U.S. LPG, the two companies said in separate statements. Gas prices have come under pressure from an oversupply of natural gas, including shale gas.
Traditionally, users in Asia rely for the bulk of their imports on Middle East LPG, whose pricing is based on contract prices for propane and butane Saudi Aramco sets monthly.
Astomos, the LPG joint venture between oil refiner Idemitsu Kosan Co and trading firm Mitsubishi Corp, is set to ship from an LPG terminal run by Enterprise Products Partners in Texas, the two companies said.
Tokyo Electric’s planned purchase of 200,000 tonnes of LPG over the three years from 2013 will be burnt at its power plant in Anegasaki, east of Tokyo.
The purchase by Tokyo Gas, Japan’s biggest city gas supplier, would total 400,000 tonnes over the six years from 2013.