Tokyo Gas of Japan is eyeing investment into U.S. shale gas production as a hedge to LNG imports.
According to the company’s board member and executive adviser, Shigeru Muraki, Tokyo Gas signed deals to import 1.9 million tons of LNG per year but now looks to secure equal volume in shale gas production.
Muraki said the company is looking to expand its investment in shale gas production in the United States as it could be a natural hedge for LNG, Reuters reports.
He adds that U.S. gas remains competitive to oil-indexed prices as long as oil is at $70 a barrel.
Muraki notes that until 2020, LNG is expected to remain in oversupply with a further 20 mtpa drop in demand predicted as soon as Japan restarts its nuclear power-generation capacity.
India, Southeast Asia and Middle East could ease the drop in demand, but Muraki adds that currently these are only slight increases in volume.
LNG World News Staff; Image: API