Regional LNG: Toho Gas signs LNG purchase deal with Mitsubishi subsidiary

By Romel S. Gurky

Japan?s Toho Gas Co. Ltd. said it has entered into a Heads of Agreement (HoA) with Diamond Gas International Pte. Ltd., an LNG marketing subsidiary of Mitsubishi Corporation, for a purchase of LNG produced at the U.S. Cameron Project.

?We have developed Medium-term Management Plan (FY2014 to FY2018) in March 2014. In this plan, we set to provide a stable supply of energy at a competitive price as an action plan. We accurately keep track of any change in the environment for procuring energy, and strive for LNG procurement diversification, including diversification of supply sources, types of contracts and the price-index,? the company said in a statement Thursday.

Toho said that in accordance with the agreement, the company will annually purchase approximately 200,000 tons of LNG for 20 years from the start of production (scheduled in 2018) in the Cameron Project at prices linked to the U.S. natural gas price. ?By the agreement, we will diversify supply sources and the price-index,? Toho said.

The agreement for LNG purchase from the project is the second one following the sale and purchase agreement with Mitsui & Co., Ltd. (January 30, 2014), and procuration volume will be 500,000 tons in total.

?We will continue diversifying LNG procurement to ensure stable city gas supply to customers at a competitive price,? Toho said.

Cameron LNG LLC., a subsidiary of Sempra Energy, plans to construct LNG liquefaction facilities in Cameron, Louisiana, U.S. (overall capacity, 12 million tons per annum; 4 million tons x 3 trains) to liquefy the U.S. natural gas, including shale gas, and to export as LNG.

Editing by Reiner Simanjuntak