March 25, 2020 / 1:19 PM / 14 days ago

UPDATE 1-Tokyo Gas aims to boost power market share, expand LNG trading

* Aims to boost power customers to 3.8 mln in 3 yrs from 2.4 mln

* Coronavirus hits gas demand from hotels, restaurants, schools

* Oil price slump may cause appraisal losses in gas projects (Recasts with business plans, quotes)

TOKYO, March 25 (Reuters) - Tokyo Gas Co Ltd aims to boost profit to 140 billion yen ($1.26 billion) in three years from 118.5 billion yen in the year to March by expanding electricity service, liquefied natural gas (LNG) trading and its overseas business.

Under a new three-year business plan that runs to March 2023, Japan’s biggest city gas distributor aims to raise the number of customers for the company’s electricity service to 3.8 million from 2.4 million now.

Competition has intensified for utilities in Japan after the liberalisation of the 8 trillion yen ($72 billion) retail power market in 2016, followed by an opening of the $20 billion retail city gas market in 2017.

Tokyo Gas has been losing share in the gas retail market while increasing its share in power retail market.

“We want to raise the number of our overall customers from gas, power and other services to 14.8 million by March 2023 from 12.2 million now,” Tokyo Gas President Takashi Uchida told a news conference.

Other targets are to increase annual transaction volume of natural gas through expansion of LNG trading and growing overseas profits through LNG infrastructure and renewable energy assets, it said.

Asked about an impact from the coronavirus pandemic, Uchida said gas demand from hotels, restaurants and schools has been falling from this month, which means it will start feeling financial impact from April.

“We can’t predict how much impact the coronavirus will have on demand as nobody knows when it will die down,” he said.

Uchida also said the plunge in oil prices might cause appraisal losses in the company’s stake in upstream gas projects overseas, though cheaper oil will lower its procurement cost as most of its long-term LNG contracts are oil-linked.

Following the International Olympic Committee and the Japanese government’s decision to postpone the Olympic Games until 2021, Tokyo Gas will decide whether to continue its Tokyo 2020 Olympics sponsorship for another year depending on conditions, including cost, Uchida said.

“We don’t have an answer to whether or not we will continue our sponsorship as we have just heard about the postponement. We will make a decision after we learn about details,” he said.

$1 = 111.1900 yen Reporting by Yuka Obayashi; Editing by Raju Gopalakrishnan and Jane Merriman

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