Jera Charts New Course in Fuel Procurement

Jera Co., the fuel-procurement joint venture between Tokyo Electric Co. (Tepco) and Chubu Electric Co., aims to take advantage of its buying power to lower fuel costs but must deal with uncertainty created by the coming deregulation of the Japanese power market. In the second half of 2016, the 50-50 joint venture will take over the partners’ existing fuel-procurement contracts including LNG and coal, managing over 40 MMt/y of LNG contracts and becoming the largest buyer in the world. Jera will announce its procurement strategy during the next Japanese fiscal year, which starts in April. In October, Tepco Trading will become a subsidiary known as Jera LNG Coordination, handling spot and strip deals, and all functions will be integrated into Jera by the summer of 2016. It aims to manage a portfolio of both short- and long-term volumes using all the optionality of its diversified pricing formulas, ultimately lowering its procurement costs. Previously each utility has been just a buyer, allowing sellers to hold the optionality. Please fill out form below to view article.