Reuters: Japan's Osaka Gas to Expand LNG Trading to Adjust to Global Glut

Japan's Osaka Gas Co said this week it plans to expand its liquefied natural gas (LNG) trading activity as it adjusts to a market that has shifted from being undersupplied to a glut within the last two years.

The utility said as part of the trading expansion it would try to sell LNG it does not need when it sees short-term opportunities, as well as set up long-term sales agreements with other buyers of the fuel.

A surplus has emerged in global LNG production, especially in supplies from Australia, while at the same time demand from top buyers Japan, South Korea and China has stalled.

Osaka Gas - which has a minority stake of 1.25 percent in Chevron's Gorgon project in Australia - has already sold long-term contract cargoes from there to Okinawa Electric Power , and may in future sell off LNG it has contracted from a project in the United States, company officials said.

"Gorgon's contract is on an FOB (free-on-board) basis, so we can market the cargoes if there are customers who are interested," Masayuki Inoue, Osaka Gas general manager of corporate strategy told Reuters on Thursday. MORE