JERA chief says company needs to sign new LNG contracts as old ones lapse
The head of JERA, Japan's biggest power generator, said the company needs to sign more deals to buy liquefied natural gas (LNG) to meet Japanese power demand as older contracts lapse.
"Power demand in Japan is not declining now ... but our contracts will terminate one by one. So, simply, we need to bridge the gap by signing the new contracts," Yukio Kani, global CEO and chair of JERA, said at the Energy Asia conference.
"We see some big LNG demand which is still not covered by long-term contracts in the 2030s."
To meet rising LNG demand, JERA last week announced it had agreed to buy up to 5.5 metric MMtpy of LNG from the United States under 20-yr contracts with U.S. suppliers NextDecade, Sempra Infrastructure, Cheniere Marketing and Commonwealth LNG.
Qatar and the U.S. Gulf Coast are the source of most new LNG supply and Kani said that it was the right time to sign long-term contracts for U.S. supplies to secure LNG at a competitive price.
On the Alaska LNG project, Kani said that JERA was waiting for a due diligence report. The $44-B project has attracted interest from several East Asian LNG buyers including JERA, but importers remain cautious in giving firm support due to its high costs.
Kani added that the ongoing conflict in the Middle East was a worrying development that JERA was watching closely.
"What we can do as a buyer is, coming back to the very basic, diversify your LNG portfolio."
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