5 Japan Companies to Integrate LPG Biz

Tokyo, Feb. 21 (Jiji Press)–Japan Energy Corp. and four other Japanese companies said Thursday that they have reached a basic agreement to integrate their liquefied petroleum gas operations.

The move is designed to survive the harsh business environment as LPG demand has been falling in Japan due to intensified competition with other energy sources such as city gas and electricity.

The other four are Itochu Corp. , Itochu Enex Co., Osaka Gas Co. and Nissho Petroleum Gas Corp.

The integration will make the companies the second largest industry group in Japan with annual sales of 2.8 million tons, following Astomos Energy Corp., a joint venture between Idemitsu Kosan Co. and Mitsubishi Corp. .

Japan Energy, Nissho Petroleum Gas and Itochu Enex will establish a joint venture by the end of the year to consolidate their wholesale operations. Trader Itochu will undertake overseas procurement on behalf of the new company.

Consolidation has been under way in the Japanese LPG industry. In April, traders Mitsui & Co. and Marubeni Corp. are set to integrate their LPG operations. Oil refiner Showa Shell Sekiyu K.K. and trader Sumitomo Corp. have a similar plan.END

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