Regional LNG: Japan's Tohoku Electric to import LNG from Russia's Sakhalin-2
Wednesday, June 1 2005 - 09:12 AM WIB
?The contract with Sakhalin Energy will help us diversify our LNG import sources and cut our heavy reliance on Southeast Asian nations for our main source,? said a Tohoku Electric spokesman.
Earlier Wednesday, Sakhalin Energy, the operator of Russia's Sakhalin-2 project, and Tohoku Electric signed a draft agreement under which the power utility will buy up to 420,000 metric tons a year of LNG for 20 years starting from 2010 on a free-on-board basis.
The power utility currently holds five long-term LNG supply contracts with four nations, importing a total of about 2.77 million tons a year.
Of this, Tohoku Electric imports 1 million tons a year from Malaysia and 830,000 tons from Indonesia, meaning its imports from Southeast Asian nations accounts for 66% of total imports, the Tohoku Electric spokesman said.
With Indonesia, Tohoku Electric has a five-year contract that started January this year and expires Dec. 31, 2009.
Additionally, Tohoku Electric's LNG import volume is likely to fall in the years ahead, the spokesman said.
The contract between Tohoku Electric and Sakhalin Energy marks the sixth deal ever by a Japanese power and gas utility to import LNG from Russia on a long-term basis.
On Monday, Hiroshima Gas Co., a Japanese gas utility, signed an agreement for a 20-year deal with Sakhalin Energy to start importing a maximum of 210,000 tons for 20 years from 2008.
Over the past two years, Tokyo Electric Power Co., Tokyo Gas Co., Kyushu Electric Power Co., and Toho Gas Co. have agreed with Sakhalin Energy to purchase LNG on a long-term basis.
Sakhalin Energy is the operator of the Sakhalin-2 project in Russia. It is building an LNG plant on Sakhalin island to deliver 9.6 million tons a year to Japan, South Korea, and North America. (*)