TOKYO, Jan 11 (Reuters) - Japan's Chubu Electric Power Co said on Friday it and Korea Gas Corp (Kogas) will jointly buy liquefied natural gas from Italy's Eni for five years, as Asian companies look for new ways to cut import costs of the fuel and secure supplies.
The three companies have struck a basic agreement for supply of a total 1.7 million tonnes over a period between May 2013 and December 2017, Chubu, Japan's third-biggest regional power utility, said in a statement.
It would be the first time an Asian company has teamed up with a cross-border regional rival for a long-term LNG contract, a Chubu spokesman said.
Chubu, Kogas and Eni aim to come up with detailed sales agreements by March, the Chubu spokesman said, adding prices were competitive in the Asian market. He declined to comment when asked if prices are linked to oil prices as are most of the existing long-term contracts in Asia.
'(The joint deal with Kogas) would give us flexibility of supply and also add us stability as Eni has a range of sources to supply,' the Chubu spokesman said.
Chubu has had communication channels over LNG procurements with Kogas, the world's biggest corporate buyer of LNG, since 2002 and made LNG swap deals.
The agreement would help Chubu meet its already high reliance on gas-fired plants. Unlike many power utilities here, the Nagoya-based company has decided to rely on non-nuclear power generation in the next couple of years while boosting safety devices at its only nuclear plant in Hamaoka.
Chubu currently relies on Qatar for the bulk of its LNG. In the business year ended last March, Qatar accounted for 64 percent of Chubu's LNG imports, followed by Russia for 9 percent and Australia and Indonesia which accounted for 8 percent each.
(Reporting by Risa Maeda; Editing by Muralikumar Anantharaman) Keywords: ENERGY CHUBU ELECTRIC/LNG
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