By bne
Japan’s JERA announced on June 11 that it had signed separate 20-year agreements to buy up to 5.5mn tonnes per year (tpy) of US LNG from several different developers on the Gulf Coast.
According to the announcement, the deals include sale and purchase agreements (SPAs) with NextDecade and Commonwealth LNG, as well as non-binding heads of agreement (HoAs) with Sempra Infrastructure and Cheniere Marketing. JERA said the agreements had been introduced publicly on June 11 at the US Department of Energy (DoE), though the deals included one with NextDecade that had been announced by the US company on May 29.
JERA’s global CEO and chair, Yukio Kani, told Reuters that his company was “rebalancing towards the global supply mix” in an effort to reduce its reliance on imports from Australia. Indeed, once the new deals take effect, the US will supply nearly 30% of JERA’s LNG mix, up from 10% currently, Reuters reported. According to the news service, Oceania and Asia – including Australia – currently account for more than half of JERA’s LNG mix.
JERA said the LNG procured through the new partnerships would “uniquely” support its strategic priorities by offering “competitive pricing, flexible contract terms and strong market fundamentals”. All of the volumes under the agreements will be delivered under free on board (FOB) terms with no destination restrictions. JERA said this would allow it to “optimise shipping routes and respond flexibly to evolving market conditions and LNG demand across the Asia-Pacific region”.
The agreement with NextDecade covers 2mn tpy from the proposed Train 5 at the Rio Grande LNG terminal in Texas. The one with Sempra covers offtake of 1.5mn tpy from the planned second phase of Port Arthur LNG, also in Texas. And the deal with Commonwealth covers 1mn tpy from the facility that company is developing in Louisiana.
In Cheniere’s case, the new agreement appears to cover supply from either of its two facilities in Louisiana and Texas and could be extended beyond the initial 20-year term. According to Reuters, Cheniere had previously struggled to line up a Japanese buyer for its LNG.
