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Toshiba seeks buyers for American gas

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According to the latest Bloomberg report, Toshiba Corporation is seeking help from one of the world’s biggest buyers of LNG to avoid billions of dollars in potential losses if it cannot sell American gas.

Toshiba is working with Japan’s Jera Co. to help it find buyers for gas it has a contract to liquefy in the US starting in 2019.

Since Toshiba has not yet secured long-term contracts, it may be forced to sell the LNG in spot markets at a loss, or decide not to process gas at Freeport LNG Development LP’s plant in Texas.

Toshiba announced in June that it could face potential losses of 971.4 billion yen (US$8.5 billion) at its power and infrastructure division. The company has announced that this is mainly due to its LNG contract in the US.

Toshiba shares added 1.8% to close at 246.7 yen in Tokyo trading, after earlier falling as much as 7.1%.

When Toshiba struck the LNG deal with Freeport in September 2013, the outlook for profit seemed much larger. A global gas glut has narrowed the price spread between the US and Asia by more than half since Toshiba agreed to buy the right to liquefy 2.2 million tpy of LNG for 20 years from the Freeport project.

Toshiba has conditional agreements with multiple buyers to sell more than half of its output from the Freeport project, but none of them are legally binding.

Read the article online at: https://www.lngindustry.com/liquefaction/23012017/toshiba-seeks-buyers-for-american-gas/


 

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