JERA splits its shipping business by charter length, procuring LNG vessels based on concluded free-on-board contracts and, or, tolling agreements.

JERA executive officer Yuichiro Kato, who is in charge of LNG shipping, said economics and safety are high priorities when vessels are being evaluated, alongside charter term, tank size and propulsion.

A shipping business unit (SBU), under the control of the company’s business development department, is responsible for the long-term chartering and shipowning.

Optimisation activities

Subsidiary LNG Marine Transport (LMT), which is monitored by the SBU, charters all of the LNG vessels in the company’s fleet on a long-term basis and provides LNG transportation services. This includes the operation of ships on a contract of affreightment basis.

Supporting JERA’s LNG optimisation activities, spot, short-term chartering and marketing operations have been transferred to JERA Global Markets (JERAGM) in Singapore, Kato said.

“When necessary, LMT-chartered vessels will be sub-let to JERAGM on a short-term basis for the same objective,” he said.

The LNG giant has also started working on LNG bunkering in Japan and is keen to expand into this sector overseas.

When the company took over Chubu Electric Power Co’s business interests on 1 April, they included a stake in joint venture Central LNG Shipping Co and its associate, Central LNG Marine Fuel Co, which is building a 3,500-cbm LNG bunker vessel at Kawasaki Heavy Industries to serve the Japanese market.

LNG bunkering

Kato said the company is also looking at a shore-to-ship LNG bunkering facility at the Kawagoe power plant.

Both projects are scheduled to be in commercial operation in the fourth quarter of 2020.

“JERA hopes to keep on being actively involved in LNG bunkering in the ports of Ise-Mikawa Bay area, and is seeking opportunities to expand our business in other both domestic and overseas ports,” Kato said.