Osaka Gas May Pull Out of Marubeni Thermal Power Project

Date: 2015-12-20

Osaka Gas Co. may pull out of a thermal power project planned with Marubeni Corp. amid signs of nuclear restarts and increasing calls to reduce carbon dioxide from power generation.

The Osaka-based company is considering giving up on its participation in the project in Ibaraki prefecture, Takahiro Yamane, a spokesman for Osaka Gas, said by phone Monday. He said no decision has been made and couldn’t confirm project details.

The Nikkei newspaper reported without attribution on Sunday that Osaka Gas plans to withdraw from the 30 billion yen ($248 million) power project, which will use coal as fuel and is expected to start running by March 2019. Marubeni will examine the feasibility of the project while seeking a new partner, the paper reported.

Marubeni officials weren’t immediately available for comment.

Japan’s nuclear fleet was gradually taken off line in the years since the Fukushima disaster, with the last of the country’s 43 operable commercial reactors closed in September 2013 for safety checks. Power producers turned to coal and gas as power sources to make up for the lost or suspended nuclear capacity.

Kyushu Electric Power Co.’s two reactors came back online this year. Three other reactors have met safety standards to restart and 20 more units are seeking clearance, according to the Japan Atomic Industrial Forum.

Japan’s reactors are seen resuming operation faster than originally anticipated, with three restarting in the first half of 2016, London-based consultant Energy Aspects said in a report dated Dec. 17.

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