Centrica forms LNG swapping alliance with Tokyo Gas

British Gas owner Centrica has formed an alliance with Tokyo Gas which will see them swap shipments of liquefied natural gas (LNG).

The aim of the deal is to bring down the cost of procuring LNG by reducing spending on transportation.

The two companies have agreed to work together to “optimise contracted volumes from both Atlantic and Asia-Pacific markets through location swaps”. They intend to enter a legally binding contract on the basis of the agreement.

Centrica co-managing director of energy, marketing and trading Jonathan Westby said: “We are delighted to formalise our long-standing relationship with Tokyo Gas and we welcome the opportunity to expand our LNG activities in Asia Pacific. Building alliances, such as this, helps towards lowering LNG procurement costs and this can benefit customers around the world.”

Tokyo Gas executive officer Kentaro Kimoto said: “I am hoping that the global LNG market will be activated by flexible LNG diversion across Pacific and Atlantic regions under our collaboration with Centrica. Through initiatives like this opportunity, we will make further efforts to lower LNG procurement cost in order to enhance our customer value.”

In August, Centrica signed a new five-year deal with Qatargas to buy up to two million tonnes of LNG each year starting in January 2019.