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Chevron Corp. (NYSE:CVX) is capitalizing on Japan’s move away from nuclear energy and has signed a contract to provide 1 million tonnes of Liquified Natural Gas to Japanese utilities company, Tohuku Electric Power.
Japan has largely moved towards LNG after the disaster at Fukushima last year. Last week, Japan finished shutting down all nuclear power plants, which provided about 30 percent of electric power for the country. Japan has been entering into contracts with companies such as Chevron and its competitor, ConocoPhillips (NYSE:COP), in order to bridge the energy gap.
Both Chevron and ConocoPhillips have been hard at work developing LNG facilities in Australia to meet the increasing demand from Asia. Chevron plans to start shipments from its two Australian projects within the next few years. The company’s most recent contract with Tohuku Electric will account for about 80 percent of the output of Chevron’s $29 billion Wheaton project.
LNG demand from Japan has jumped 27 percent between March 2011 and March 2012. The increased demand has boosted prices for LNG but also caused increased costs for developers who face a limited labor force in Australia as more and more companies seek to expand their operations.
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