JERA to invest in Freeport LNG
Japan's JERA announced on November 15 it was investing around $2.5bn in the purchase of a 25.7% stake in the Freeport LNG project in Texas, US.
The company said the purchase from Global Infrastructure Partners would help ensure stable LNG supply to Japan. And as there are no resale or destination restrictions on LNG exported from the project, supplies can be delivered elsewhere in Asia when Japan does not need the gas.
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JERA already has a 25% interest in Freeport LNG's first train and purchases around 2.32mn metric tons/year of LNG from the project for use in Japan. The company is now seeking a stake in the overall facility, which consists of three trains with a combined output of almost 15.5mn mt/yr.
JERA said the current gas crisis highlighted the importance of security of supply for Japan, which its investment would help ensure. The company also stressed that increased supply of LNG to Asia would help reduce emissions by displacing coal in the power mix.
"Increasing our ownership position in Freeport not only provides JERA Americas with highly cost-competitive LNG that may be used to ensure a stable supply to the global market, it also will allow us to build upon and accelerate some of efforts that Freeport has already initiated toward the goal of cleaner energy," JERA Americas CEO Steven Winn said in a statement. "Securing a stable supply of LNG is becoming increasingly important as we witness sharp price increases around the world."
Freeport is the only US liquefaction facility to use electric motor-driven technology for its power needs, which emits 90% less CO2 than gas turbines, JERA said. There is also a fully permitted and shovel-ready plan to add a fourth train at the complex.
This article first appeared in Gas Pathways, a platform dedicated to technology and innovation in the natural gas industry. Click here for more information.