Reuters: Toshiba Tries to Sell Down $7 billion U.S. Gas Commitment

Japan's Toshiba, struggling with a major accounting scandal, is trying to sell down a $7.4 billion commitment to U.S. liquefied natural gas (LNG), which it signed two years ago as part of a plan to sweeten sales of turbines for power plants.

A plunge in Asian gas prices means an expected U.S. export bonanza has fizzled out before it even started, and has left the giant conglomerate potentially exposed to LNG processing fees of up to $370 million a year.

Toshiba confirmed in an interview that it is looking to cut its commitment in the early years of the 20-year contract, but declined to comment on cost.

"We have to admit the competitiveness of (U.S.) LNG is getting weaker compared to JCC prices," said Akira Nakatani, a manager in Toshiba's LNG group, referring to the typical price mechanism for long-term supplies to Japan.

In recent weeks, Toshiba has held talks with oil and gas majors, utilities, trading houses and other potential LNG buyers to try to offload its commitments, according to six industry sources. Nakatani declined to comment on the names of possible buyers. MORE