Tepco Secures US LNG Supplies

Tokyo Electric Power Co. (Tepco) has agreed to buy LNG from the US through Mitsui & Co and Mitsubishi Corporation.

The Japanese utility will be buying approx. 800,000 tons of LNG per year from 2017 for the period of about 20 years. “The natural gas linked price (Henry Hub linked price is planned to be applied to the price index for the first time in a TEPCO long-term LNG contract,” the company said in a statement. Supplies will based on prices at the Henry Hub delivery point in the United States. 

The LNG will come from U.S. Cameron Project, which is an LNG project being planned in the State of Louisiana by Cameron LNG, a subsidiary of Sempra Energy. Mitsui & Co., Ltd. and Mitsubishi Corporation are currently in discussion with Cameron LNG regarding a tolling agreement of processing shale gas produced in the U.S.

In addition to approx. 800,000 tons (annual) of LNG to be purchased from the Cameron Project, approx. 1.2 million tons (annual) will be committed through purchases from multiple sources, which will be a total of 2 million tons of LNG to be secured. “We consider this as the first step towards achieving the target of 10 million lean LNG.”