Japan's JERA Eyes European LNG Market as it Signs Supply Deal with EDF

Japanese trading firm JERA has entered into a sales and purchase agreement with EDF Trading Limited (EDFT) for sale of LNG.

JERA will sell approximately 1.5 mt to EDFT at European LNG terminals for a period of approximately two and a half years beginning in June 2018. The price of LNG sold will be linked with European gas market price and the volume sold can be adjusted by JERA's discretion, the Japanese firm said in a statement released Thursday.

The agreement, JERA said, enables it to secure the flexibility to correspond with the LNG demand fluctuation and also expand the opportunity for LNG trading business toward the future.

JERA, formed last year, is 50:50 joint venture between Tokyo Electric Power (Tepco) and Chubu Electric Power to secure stable and competitively priced LNG.

The company has ambitions to steadily expand its trading business and plans to almost double its LNG fleet by 2030 to nearly 30.

Earlier this year, the company said its contract LNG volume in FY2030 is seen at 30 to 40 mt per annum (mtpa) compared with 40 mtpa this year. Long term LNG offtake commitment is seen falling from 35 mt in July 2016 to 15 mtpa in FY2030 as the company wants to optimize its LNG portfolio by procuring through combination of highly flexible short run and spot contracts and economically efficient and stable long term contracts.