About two weeks after signing a business alliance agreement with Russia’s Novatek, Japan’s Saibu Gas has revealed that it is considering an expansion of its flagship Hibiki LNG import terminal. Saibu Gas will consider building one or two new 230,000 cubic metre LNG storage tanks at the 7.45 million tpy terminal in Kitakyushu City, Fukuoka Prefecture, the utility said last week.
It will cost an estimated 36 billion yen (US$327 million) to build two such storage tanks, Saibu Gas said, adding that a final investment decision (FID) would be made in fiscal 2019, which starts on April 1.
Saibu Gas anticipates that the expanded terminal would be used as a transit point for LNG exports by Novatek via the Arctic Ocean to Asia, especially China and Southeast Asia, where demand is projected to grow.
Saibu Gas said that it would “promote its global business by using the Hibiki LNG import terminal”. Saibu Gas is one of Japan’s four major gas utilities based in Fukuoka City, Fukuoka Prefecture on Kyushu, the westernmost of the country’s four main islands.
Saibu Gas’s Hibiki LNG import terminal went online in November 2014 and currently has two 180,000 cubic metre LNG storage tanks and can receive large LNG carriers.
Saibu Gas and Novatek signed a business alliance agreement at the end of 2018. The Russian company said at the time that the two companies had agreed to “consider potential co-operation to enter the end-customer market and optimize Novatek’s LNG portfolio supplies to the Asia-Pacific region by utilising the Hibiki LNG terminal.”
Novatek’s first deputy chairman, Lev Feodosyev, said: “The Asia-Pacific region is a priority destination for Novatek’s LNG projects. Our ability to use the Hibiki terminal will help diversify our customer base and increase the flexibility of deliveries to the premium LNG markets.” Hibiki LNG, a 90:10 joint venture between Saibu Gas and Kyushu Electric Power, operates the terminal.