TOKYO, Dec 27 (Reuters) – Japanese companies have signed several agreements to source liquefied natural gas (LNG), with a basic agreement of up to 10 years reached with Oman LNG and a 20-year agreement signed Tuesday with the American Venture Global. .
Global LNG supply has been tight since Russia invaded Ukraine and cut gas supply flows to Europe, leading European countries to import record amounts of LNG cargoes, which weighed on global supply and drove up prices.
Major Japanese power producer JERA and trading companies Mitsui & Co (8031.T) and Itochu Corp (8001.T) have all signed supply deals with Oman LNG for a total of 2.35 million tonnes per year, the official ONA news agency reported on Tuesday.
JERA, Japan’s largest LNG importer, said it had signed a key term sheet with Oman LNG to purchase up to 12 cargoes, or around 0.8 million tonnes of LNG per year for 10 years, starting in 2025. .
The contract, signed free on board, offered “great flexibility” and was expected to help Japan better respond to uncertainties regarding domestic LNG supply and demand, the utility said.
“Competition for LNG supply has intensified, and therefore, a stable fuel supply in a timely manner in accordance with the national electricity supply and demand situation is necessary to ensure a stable energy supply in Japan,” JERA said.
Mitsui and Itochu confirmed the signing of basic agreements with Oman LNG, but declined to give details.
Itochu, which has a 20-year contract with Oman LNG to buy 0.7 million tonnes of LNG per year that will expire in 2025, will continue discussions with the seller to work out details, a company spokesperson said.
GREATER ENERGY SECURITY
The statements followed a report by Japanese broadcaster NHK that the three companies would obtain a total of around 2 million tonnes of LNG per year from Oman over 10 years from 2025.
Other Japanese companies were also in talks with Oman LNG over futures contracts, a government official told Reuters without naming the companies. If successful, they could boost Japan’s LNG imports from Oman to more than 3 million tonnes a year, he added.
The agreements with Oman LNG were signed during a visit to Oman by Japanese Minister of Industry Yasutoshi Nishimura.
Separately, leading Japanese oil and gas explorer Inpex Corp (1605.T) announced on Tuesday a 20-year deal with US firm Venture Global LNG to import 1 million tonnes per year from the company’s Louisiana project, including the construction is expected to begin in 2023.
The new supplies could help Japan diversify away from Russia’s Sakhalin project, which accounts for 9% of Japan’s total LNG imports, or 74.3 million tonnes per year.
Last year, Japan imported 1.9 million tonnes of LNG from Oman, or 2.6% of its total imports, and 7.1 million tonnes from the United States, or 9.5% of its total imports.
Reporting by Yuka Obayashi in Tokyo, additional reporting by Emily Chow in Singapore and Aziz El Yaakoubi and Nadine Awadallah in Dubai; Editing by Tomasz Janowski
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