Tokyo Gas plans bond issue to fund Niihama LNG terminal

Japan’s city gas supplier and LNG importer Tokyo Gas has decided to issue a transition bond in order to fund its three projects, including the Niihama LNG terminal.

This would mark the first time that Tokyo Gas would issue a transition bond through a domestic public offering as a city gas supplier in Japan, it said in a statement on Monday.

According to Tokyo Gas, the corporate bond has been selected as a model case for the Ministry of Economy, Trade and Industry’s climate transition finance model project.

In March, Tokyo Gas plans to issue 7-year and 10-year bonds worth about 20 billion yen ($173.1 million).

Furthermore, the firm said the bond serves as a new financing method to “promote low-carbon and decarbonization initiatives, including by demand-side during the transition period toward realizing a decarbonized society.”

It would be the second environmental, social, and governance (ESG) bond issued by Tokyo Gas, following the green bonds in December 2020.

Using its ESG finance, Tokyo Gas plans to invest about two trillion yen by 2030 in growth areas, including decarbonization.

Besides Niihama LNG, the firm plans to use the funds raised through the bond for investments in two more projects, Smart Energy Network and Harumi hydrogen project.

Niihama LNG terminal to start working this year

Tokyo Gas Engineering Solutions, a unit of Tokyo Gas, and partners founded Niihama LNG joint venture in 2018.

Besides the Tokyo Gas’ unit that holds 50.1 percent in the JV, the other partners include Shikoku Electric Power, Sumitomo Chemical Company, Sumitomo Joint Electric Power, and Shikoku Gas.

Tokyo Gas did not provide an update in the statement on Monday regarding the construction of the 1 mtpa LNG terminal on Shikoku island and the planned launch date.

The Japanese firm previously said it had planned to start the facility by February 2022.

Also, the terminal would supply gas to a new 150 MW CCGT power plant scheduled to come online in 2022.

Tokyo Gas already operates the Hitachi, Negishi, Sodegaura, and Ohgishima LNG terminals.

In 2020, the firm formed an LNG trading unit to boost its volumes. According to its website, Tokyo Gas imports about 13.2 mtpa of LNG and operates and manages 12 vessels.

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