JERA, the Japanese fuel buying joint venture (JV) of power utilities TEPCO and Chubu Electric, is currently considering an initial public offering (IPO) as a strategic option for the future. The company intends to become an autonomous and global energy company with presence in the whole energy value chain including fuel procurement, power generation and wholesales of electricity and gas. However, it also ruled out the potentiality of further integrations with other companies for the time being.
JERA's parents TEPCO and Chubu Electric are expected to integrate their domestic thermal power generation and gas distribution businesses into JERA by April 2019. Once the process is complete, JERA will become Japan's largest thermal power producer, with 26 thermal power plants totalling 67 GW. It will also include four TEPCO LNG terminals (two fully owned, in Futtsu and Higashi-Ohgishima, and stakes in two others in Sodegaura and Negishi) and four Chubu Electric LNG terminals (three fully owned, namely Kawagoe, Yokkaichi and Joetsu, and stakes in the Chita LNG terminal). In total, Chubu Electric and TEPCO will group 14 affiliates and subsidiaries. JERA will also work in parallel to consolidate its domestic position and become the world’s largest buyer of LNG. The integration is also expected to increase its total asset value to JPY4tn (US$36bn) from the JPY1.2tn (US$11bn) recorded in December 2018.
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