Japanese firms sign multi-year agreements to buy LNG from Oman, U.S.

Tokyo -- Japanese companies have inked several deals to receive liquefied natural gas, LNG, supplies, with an up to 10 years basic agreement reached with Oman LNG and a 20 year deal signed with U.S.-based Venture Global.

Global LNG supply has been tight since Russia invaded Ukraine and cut gas supply flows to Europe, leading European nations to import record amounts of LNG cargoes, straining global supplies and elevating prices.

Top Japanese electricity generator JERA, and trading houses Mitsui & Co and Itochu Corp all signed supply deals with Oman LNG for a total of 2.35 million tonnes per year, state news agency ONA reported on Tuesday.

JERA, Japan’s biggest importer of LNG, said it had signed a key term sheet with Oman LNG to buy up to 12 cargoes, or about 0.8 million tonnes of LNG per year for 10 years, beginning from 2025.

The contract, signed on a freeon-board basis, offered “high flexibility” and was expected to help Japan better respond to uncertainties with domestic LNG supply and demand, the power company said. “LNG procurement competition has been intensifying and thus, stable procurement of fuel in a timely manner in line with the domestic electricity supplydemand situation is needed to secure a stable supply of energy in Japan,” JERA said.

Mitsui and Itochu confirmed signing basic agreements with Oman LNG, but declined to give details.

Itochu, which has a 20-year contract with Oman LNG to buy 0.7 million tonnes of LNG per year that will expire in 2025, will continue discussions with the seller to set details, a company spokesperson said.