US Venture Global Signs 20-Year LNG Supply Deal with Japan's JERA
(Reuters) — U.S. company Venture Global LNG announced a deal to supply LNG to Japan's JERA for 20 years, it said on Friday.
Venture Global will sell 1 million tonnes per annum (MTPA) of LNG to JERA, Japan's biggest power generator and one of the world's biggest LNG buyers, from its CP2 LNG project, it said in a statement.
CP2 LNG is Venture Global's third project and is expected to start construction later this year. So far, over a third of its nameplate capacity had been sold, it said in a statement.
"To date, the company has announced sales and purchase agreements for over a third of the 20 million tonne per annum nameplate facility with active discussions ongoing for the remainder of its capacity," it said.
"This is a destination free free-on-board (FOB) contract, which enables JERA to secure LNG in a high flexible manner and is expected to help with our capability to respond to volatility in the domestic electricity supply and demand," it added, citing JERA senior managing executive officer, optimization, Sunao Nakamura.
In its own statement on Friday, JERA said that it will purchase LNG for 20 years from the commencement of CP2's commercial operations.
Venture Global has about 70 MTPA of LNG export capacity in operation, construction or development in Louisiana, including the 10-MTPA Calcasieu Pass (operation and construction), 20-MTPA Plaquemines (construction), 20-MTPA Delta (development) and 20-MTPA CP2 (development).
In February, Venture Global signed an agreement to provide a total of 2 million tonnes per year of LNG to China Gas Holdings. China Gas said it would receive 1 million tonnes of LNG annually from Venture Global's Plaquemines LNG and CP2 LNG each for 20 years.
JERA last year inked a deal to buy LNG cargoes from Oman LNG and also with the new operator of the Sakhalin-2 energy project in Russia to maintain long-term deliveries of LNG.
A JERA official said in February however that securing new long-term LNG contracts could be challenging for Japanese companies due to uncertainty over demand.
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