As though a $6bn balance sheet hole were not enough, Toshiba also has a gas problem
It is on the hook for liquefied natural gas it has bought on a 20-year contract with Freeport — but for which it still has no customers
Tokyo/Singapore — Japan’s Toshiba, scrambling to fill the balance sheet hole left by a $6.3bn hit to its nuclear operations, is also on the hook to pay billions of dollars for a US natural gas contract. The computer chips-to-nuclear conglomerate surprised many in 2013 when it announced plans to buy 2.2-million tonnes of liquefied natural gas (LNG) annually from Freeport LNG in Texas, exposing it to more than $7bn in charges over a 20 year period. The company still has no firm commitments to sell the gas, a Toshiba spokesman said on Friday. Toshiba’s contract requires it to either procure natural gas to liquefy in Freeport’s facility and resell as LNG or pay a fixed gas processing fee to Freeport of about $370m a year for the life of the contract. The Toshiba spokesman said the company had an agreement with Japan’s Jera, the world’s biggest single buyer of LNG, to help sales and marketing of the fuel from 2019, when the contract with Freeport goes into effect. A Jera spokesman said t...
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