Japan's biggest city gas supplier Tokyo Gas has withdrawn from an offshore wind power project at Kashima Bay in Ibaraki amid rising costs, its president and chief executive, Shinichi Sasayama, told a press conference on Thursday.
Sasayama declined to elaborate on the withdrawal, but said the company would continue pursuing other projects, including floating offshore wind, since it sees significant potential in the energy source.
"If we can form a consortium to establish a domestic supply chain and create an environment where projects can be launched successfully and continuously, these initiatives are expected to move forward," Sasayama said, adding the government was among parties with which the company is in talks on cutting costs.
Asked about the LNG market outlook, Sasayama said the approach of winter could boost spot prices from current levels of about $30 per million British thermal units (mmBtu), depending on weather conditions and the pace of inventory drawdowns.
As Tokyo Gas has no long-term LNG supply contracts with Middle Eastern producers, it expects no impact on supply volumes, he said.
Sasayama saw no significant immediate impact on the company's US business after the midterm election, though environmental regulations could change. The company will track Middle East developments and their impact on energy prices, he added.
Separately, Tokyo Gas unit Tokyo Gas Engineering Solutions, Nippon Paper Industries, and data centre operator Getworks will launch a container-based data centre business in Hokkaido, the companies said on Thursday.
Its starting capacity of six MW by the end of next March will expand to 40 MW by September 2027, with potential to rise further to 150 MW.
(Reporting by Yuka Obayashi; Editing by Clarence Fernandez)