Toshiba to pay US$800 million to exit US LNG business

Toshiba to pay US$800 million to exit US LNG business

Japan's Toshiba Corp said on Thursday it is exiting its U.S. liquefied natural gas (LNG) business and paying an overseas "buyer" it did not identify US$800 million to assume its commitment to purchase 2.2 million tonnes per year of the fuel from Freeport LNG in Texas.

The logo of Toshiba Corp is seen behind cherry blossoms at the company's headquarters in Tokyo
The logo of Toshiba Corp is seen behind cherry blossoms at the company's headquarters in Tokyo, Japan April 11, 2017. REUTERS/Toru Hanai

TOKYO: Japan's Toshiba Corp said on Thursday it is exiting its U.S. liquefied natural gas (LNG) business and paying an overseas "buyer" it did not identify US$800 million to assume its commitment to purchase 2.2 million tonnes per year of the fuel from Freeport LNG in Texas.

The Nikkei business daily reported on Thursday, without citing a source for the information, that the buyer is a unit of Chinese gas company ENN Group.

However, Toshiba said in its statement that it would only identify the buyer when the final sales contract is signed.

An ENN Group spokesman said he was not aware of the deal when contacted by Reuters.

The sale would remove a roughly US$7 billion commitment to process U.S. shale gas into LNG that the industrial conglomerate signed in 2013 as an incentive for sales of turbines for power plants, one of its major businesses.

The company has spent years trying to either sell the gas to power customers or offload the business after signing the 20-year contract to buy LNG from Freeport.

(Reporting by Makiko Yamazaki and Osamu Tsukimori; Additional reporting by Meng Meng in BEIJING; Writing by Aaron Sheldrick; Editing by Christian Schmollinger)

Source: Reuters

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