Japanese natural gas distributor Osaka Gas Co. posted a 1.3 billion yen ($9.9 million) loss for the April-December period, after a fire at the Freeport LNG plant which has yet to restart, the company said on Feb. 6.

The Freeport plant, which supplied Osaka Gas with 2.32 million tonnes of LNG per year, was shut down after a fire in June 2022, and has yet to restart operations.

Osaka Gas, which made a profit of 55.1 billion yen in the same period a year earlier, said losses related to Freeport's shutdown were at 125.8 billion yen and are expected to widen to 149.5 billion yen for the full year ending on March 31.

The revised annual loss estimate was 40 billion yen more than the company had expected in October.

The bigger-than-expected loss is 'mainly because of higher costs of buying alternative supply due to delays in resumption of Freeport LNG,' a spokesperson at Osaka Gas said.

Freeport is the United States' second-biggest LNG exporter.

Osaka Gas lifted its profit forecast for the full fiscal year on Feb. 6 to 36 billion yen from 29 billion yen in the previous forecast, on the back of additional income from the sale of cross-held shares, it said.

"For the latest earnings forecast, we have made a conservative assumption that we won't receive LNG from Freeport by the end of March, but we understand that the Freeport's process to get approvals from local authorities to resume operation is advancing and we hope it will resume partial operation soon," Osaka Gas spokesman added.

JERA, Japan's biggest power generator and another LNG buyer from Freeport, has also posted a nine-month loss mostly due to higher costs of alternative fuel amid a soaring spot market.

Comments