Swiss resources trader Glencore Xstrata Plc (GLEN.LN) plans to start supplying liquefied natural gas to Japanese utilities this year, the Nikkei reported in its Friday morning edition.
Swiss resources trader Glencore Xstrata Plc (GLEN.LN) plans to start
supplying liquefied natural gas to Japanese utilities this year, the Nikkei
reported in its Friday morning edition.
The firm will use Morgan Stanley traders in
London
and
Singapore
to
handle LNG purchases, and also assign personnel to
Tokyo
. The
staff will be expanded if necessary.
LNG is traded under either long-term contracts that can span more than two
decades or short-term contracts of four years or less. Glencore will focus on
short-term spot trading, which will allow it to flexibly switch customers based
on prices and increase earnings.
The company currently sells steam coal to utilities and coking coal to steelmakers
in
Japan
. Annual
trading volume is about 35 million tons, or around 20% of the Japanese market. The
firm will utilize its existing sales network for LNG distribution.
Demand for LNG in
Japan
is
rising as many nuclear power plants remain idle after the March 2011
earthquake. Power companies are planning to increase imports from the
U.S.
and
Russia
in
the medium term to secure stable supplies while curbing costs.
With the Japanese market expanding, resources firms worldwide are stepping up
sales of LNG in
Japan
.
Britain
's BG
Group Plc set up a Japanese branch early this year. And oil companies including
BP Plc are also boosting sales.
Such advances by foreign firms could increase spot trading and spur competition
among suppliers, potentially lowering fuel costs for power companies.
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