Japan's Jera to Buy from LNG Canada

Japan’s Jera announced April 9 that it has entered into a preliminary agreement with Diamond Gas International to buy LNG from LNG Canada Project.

The contract with the Mitsubishi Corporation unit is for the purchase of up to 1.2mn mt/yr (or 16 cargoes) of LNG for approximately 15 years beginning April 2024.

“This first procurement of LNG from Canada diversifies Jera’s supply portfolio and can be expected to contribute to stable and economical LNG procurement in the future,” Jera said in a statement.

The destination clause in the agreement is in line with the Survey on LNG Trades report released by the Japan Fair Trade Commission in June 2017. Jera believes this will help it respond appropriately to LNG supply and demand uncertainty and expand opportunities for optimising its LNG portfolio.

A 50-50% LNG joint venture of Tokyo Electric and Chubu Electric set up in 2015, Jera is the world’s biggest LNG buyer.

LNG Canada will initially export LNG from two trains totalling 14mn mt/yr, with the potential to double up to four trains in the future. Last year, Shell took the decision to build LNG Canada.