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The new long-term deals:
- Inpex Corp., Japan’s top gas explorer, inked a deal to procure 1 million tons a year from Venture Global LNG’s CP2 export project in Louisiana for 20 years. CP2 is slated to begin construction next year, according to Venture Global.
- Several Japanese companies, including Mitsui & Co., Itochu Corp. and the nation’s top power producer Jera Co., will enter an agreement with Oman to purchase an additional 2 million tons or so a year from 2025 for 10 years, the NHK said on Tuesday. Bloomberg previously reported that Mitsui was shortlisted by Oman.
The deals come as Japan’s government is reevaluating how it can enhance energy security in the face of a fuel crunch at home. Global LNG supply is slated to remain tight for years, which threatens to increase import costs and add to rising inflation.
This also marks a shift for Japanese LNG importers, which had been moving away from long-term deals on the expectation that the transition to cleaner energy sources would reduce gas demand this decade. Companies were instead increasing dependence on the short-term spot market to secure LNG supplies.
However, with the spot market tight and prices near a record high, Japanese companies are now reversing course and locking in supply for years at more attractive rates.
A Mitsui spokesperson said the trading company was involved in the deal reported by NHK, but declined to comment further. A spokesperson for Itochu declined to give details in an emailed comment, but said the firm will continue negotiations on long-term contracts for LNG with Oman to support Japan’s energy security.
Jera plans to make an announcement later Tuesday, spokesperson Hiroyuki Usami said, declining to give further details of the contract.
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