The Tokyo Electric Power Company (TEPCO) has reached a broad agreement with two major Japanese trading houses to purchase 800,000 tons of U.S. shale gas annually as part of cutting down fuel costs, Japanese media reported on Thursday.
According to Japan's NHK broadcaster, the 20-year-contract would begin in 2017.
Asia's biggest power utility, TEPCO was also in the final stages of negotiations with other businesses to purchase 1.2 million tons of shale gas per annum. It says using shale gas, which is somewhat cheaper than conventional natural gas, would help cut overall fuel costs by around $530 million a year.
Since the nuclear accident at TEPCO's Fukushima Daiichi power plant, rising costs of fuel for thermal power generation have been weighing on the company's finances, and its fuel costs are likely to reach around $30 billion this business year.
The March 2011 tsunami-triggered Fukushima nuclear disaster has brought immense financial burden on TEPCO by way of billions of dollars worth compensation to the displaced. The company has been pressing the government for finance to defray the compensation. More than 160,000 residents in a 30-kilometer radius of the disabled plant had been evacuated following radiation leak that contaminated water, food, and the ocean front.
by RTT Staff Writer
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