Japan signs long-term US LNG deals to diversify its global portfolio

JERA, Japan’s largest power generator, has signed new long-term agreements to purchase up to 5.5 million metric tons per annum (mtpa) of liquefied natural gas (LNG) from the United States, the company announced on June 11. 

The 20-year supply contracts are part of JERA’s strategy to diversify its LNG portfolio beyond Australia and secure stable energy sources amid rising domestic electricity demand, Caliber.Az reports via foreign media.

The deals, which include both newly signed and previously reported agreements, will see deliveries commence around 2030. Of the total 5.5 mtpa, 2.5 mtpa are covered under non-binding Heads of Agreement (HOA).

The move comes as Japan, the world’s second-largest LNG importer after China, seeks greater flexibility in energy procurement to power its economy and support the rapid expansion of data centres.

Among the latest agreements, JERA signed an HOA with Sempra Infrastructure for 1.5 mtpa from the Port Arthur LNG Phase 2 project and another HOA with Cheniere Energy for up to 1 mtpa from the Corpus Christi and Sabine Pass facilities. In addition, JERA finalised a 20-year sales and purchase agreement with Commonwealth LNG to secure 1 mtpa from the company’s Louisiana-based project.

The 5.5 mtpa figure also includes JERA’s 20-year contract announced on May 29 to purchase 2 mtpa from NextDecade’s Rio Grande LNG project in Texas.

The new deals were welcomed by US officials as a boost to American LNG exports and global energy security.

"When we can sell energy to our friends and allies, our great ally like Japan, so that they don't have to buy it from our adversaries, that makes the world a more secure place," said US Interior Secretary Doug Burgum during a Department of Energy event in Washington.

The agreements also support US efforts to expand its position as the world’s top LNG exporter while strengthening economic ties with key allies in the Asia-Pacific.

By Sabina Mammadli