Daily GPI / Markets / NGI All News Access / Liquefied Natural Gas (LNG)

Japanese LNG JV Takes First Lower 48 Cargo

JERA Co. Inc. on Thursday announced its first purchase of liquefied natural gas (LNG) from the Lower 48 states.

The cargo is being procured under a sale and purchase agreement between JERA and Cheniere Marketing International LLP and is coming from the Sabine Pass LNG Terminal in Louisiana, which is operated by Cheniere Energy Partners LP.

Loading onto the LNG vessel Oak Spirit was completed Wednesday. It is expected to arrive at an LNG terminal used by Chubu Electric Power Co. early in January. Oak Spirit has called on the Sabine Pass terminal at least once before, in August to pick up a  spot cargo to be delivered to India, according to the U.S. Department of Energy.

JERA said it believes the purchase of US LNG will contribute to a stable energy supply in Japan through the diversification of procurement regions and LNG price indices.

"Going forward, JERA will establish an LNG procurement portfolio that can flexibly respond to changes in the business environment by increasing its procurement ratio of LNG which is free from destination restrictions, through projects such as the Freeport LNG Project in [the] U.S," the company said.

JERA is owned 50% by Tokyo Electric Power Co. and 50% by Chubu Electric and was formed as an LNG procurement vehicle for the utilities.

Earlier this year JERA President Yuji Kakimi said the global LNG sector should expect to see new buying and pricing trends emerging as the industry moves to one of greater supply volumes and greater choice in sourcing. He has also said that JERA plans to be a major player in the global gas market and could flex its muscle when it comes to procurement. "We will be buying as much as 40 million tonnes of LNG every year. This will make us the single largest buyer of LNG in the world."

JERA has also been a reseller of LNG cargos that are not needed in Japan when demand is down. In May it announced an agreement to offload about 1.5 million tonnes of LNG to EDF Trading Ltd., a unit of Electricite de France.

Last March, Canada's Veresen Inc. signed a long-term capacity agreement with JERA for its proposed Jordan Cove LNG facility.  The preliminary 20-year agreement includes JERA's purchase of 1.5 million tonnes per annum (mtpa) of liquefaction capacity, or a quarter of the 6 mtpa total capacity at the proposed export terminal in the international port of Coos Bay. Since then JERA has been an advocate with U.S. regulators for the Jordan Cove project, which has faced regulatory headwinds.

ISSN © 2577-9877 | ISSN © 1532-1231

Recent Articles by Joe Fisher

Comments powered by Disqus