Joint venture of Japanese utilities acquire interest in US power plant

The US subsidiary of Japan’s Tokyo Gas America has acquired a 25% interest in a 635MW power plant in upstate New York, marking the company’s first investment in US power generation.

The announcement was made on 14 October as part of a new joint venture company known as TTK Power.

Partners KPIC USA (25%), a subsidiary of Japanese utility Kansai Electric Power Company (KEPCO), and Tyr Energy (50%), a subsidiary of Japanese trading company ITOCHU, are also joint venture partners of TTK Power.

The Empire generation plant is managed by Energy Capital Partners and has been in operation since 2010 in Rensselaer, New York.

“Tokyo Gas and Kepco have been considering strategic cooperation in various fields to utilize the strengths of both companies, such as LNG-procurement, power plant operation, new power plant development and joint investment into overseas businesses. This investment marks the first step of that initiative and the first collaboration with Kepco in the power generation business overseas,” according to Tokyo Gas.

Both Tokyo Gas and Kansai Electric have offtake capacity from the single-train 5.3mtpa Cove Point LNG export plant in Lusby, Maryland, which is currently under construction.

Japanese trading company Sumitomo has a long-term agreement for 2.3mtpa from Cove Point. Of that volume from Sumitomo, Tokyo Gas has 1.4mtpa and Kansai Electric has 0.8mtpa. Cove Point is expected to come online by late 2017.

This could be considered as a hedging option for both prospective offtakers. Should natural gas feedgas supply into Cove Point not be used for liquefaction, the power plant in New York could be a potential consumer of the gas.

Tokyo Gas also has expanded its business development efforts in power generation in southeast Asia. In its statement, the company said that partnerships with local energy companies were continuing to take place in both regions for “value chain development.” ruth.liao@icis.com