Founding Nihonkai LNG and converting away from oil (1978)

How long a decision to change fuel actually takes

The shareholding put together under president Wakabayashi Tsuyoshi lined up Niigata Prefecture, the Hokkaido-Tohoku Development Finance Corporation, Japan Petroleum Exploration and Hokuriku Gas, leaving Tohoku Electric with only 42.3% of the votes. What changed was not merely the fuel but the manner of owning the facility that receives it. Because ¥12bn of capital was divided among five parties, the receiving terminal at Niigata East Port became not one company’s fuel store but equipment supplying feedstock for city gas and cold energy for industry as well. Had a generating company built it alone, this pattern of use would not, it appears, have arisen.

The time between deciding and the fuel actually changing over is, however, long. Five years passed from establishment to the arrival of the first cargo, six to the conversion to combined cycle, and the second oil crisis intervened, sinking the year to March 1980 to a recurring loss of ¥8.5bn. Whether a fuel decision was right cannot be seen in the year it is made; it can only be confirmed on a generation-mix table more than a decade later. The figures president Yashima Toshiaki showed in a 1993 lecture — gas 24%, oil 10% — are the point that Wakabayashi’s founding decision reached after fifteen years.