Tokyo Electric Power Company and Tokyo Gas Company have said that they have clinched the biggest ever cut in prices of liquefied natural gas from Malaysia as Asian producers strive to retain long term customers amid a glut of the fuel.
Tokyo Electric and Tokyo Gas won LNG price cuts of about five percent when they renewed twenty year contracts with Malaysia's Petroliam Nasional for fifteen years starting April 2003, said Shigeru Muraki, the general manager of gas resources for Tokyo Gas.
The price cuts combined with smaller reductions earlier this year are the first since Japan started importing LNG in 1969, and may trigger similar cuts in Korea, Taiwan and China. Japan takes almost sixty percent of global output from producers such as ExxonMobil, Royal Dutch/Shell and BP that have invested billions into new plants in the region.
“The year 2003 will be the turning point for natural gas prices,” Muraki said in an interview. “By 2010 some contract prices will be ten percent lower than the current level.''