Regional LNG: Tokyo Gas signs LNG purchase agreement

By Romel S. Gurky

Tokyo Gas Co. Ltd. signed on Friday a sale and purchase agreement with Mitsui & Co. Ltd. for the purchase of liquefied natural gas (LNG) from the Cameron LNG project in the United States, the former sad in a statement.

The project is operated by Cameron LNG LLC (Cameron LNG), a company in which Mitsui & Co. will have a stake. It will build a new natural gas liquefaction plant in the Cameron LNG Terminal in Louisiana (US) to refine and liquefy shale gas and other US-produced natural gas, exporting a maximum of 12 million tons per year.

Mitsui & Co. will handle 4 million tons of this LNG per year, of which approximately 520,000 tons will be purchased by Tokyo Gas at a price linked to the US natural gas market (Henry Hub price). The contract provides for more flexible destination than LNG contracts in the past.

Tokyo Gas reached an agreement to purchase 1.4 million tons of LNG from the Cove Point Project (USA) in April 2013. The project will provide the company with another US source of LNG, stabilizing its supplies and enabling it to purchase LNG at prices linked to the Henry Hub price.

In its "Challenge 2020 Vision," Tokyo Gas targets a reduction in raw material prices by diversifying and expanding its LNG sources, including the use of non-traditional LNG, and by expanding its international LNG value chain. ?This project brings it closer to that goal,? Tokyo Gas said.

Editing by Reiner Simanjuntak