Japanese power utilities Tokyo Electric Power Company (TEPCO) and Chubu Electric have signed a Memorandum of Understanding on the creation of a comprehensive alliance, that would cover the entire energy supply chain (from upstream and fuel procurement to power generation). The companies will create a 50-50 joint venture within the second half of the financial year (by March 2015). The alliance will source LNG for the two companies (up to 40 Mt/year of LNG), becoming the largest LNG buyer worldwide, as well as coal and oil. It will be in charge of overseas projects, LNG terminal operations, LNG carriers operations and energy trading. Where power generation is concerned, the alliance will be in charge of the construction of new thermal power plants and of thermal plant replacement, overseas power generation and energy infrastructure operations.
Both companies are facing financial difficulties since the Fukushima disaster and the shutdown of their nuclear power plants; TEPCO is facing massive compensations for damages and relies on government's financing, while Chubu Electric has posted financial losses since 2011 due to expensive LNG purchases.
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