Japan’s Jera sells LNG to EDF Trading

Japan’s Jera Co, a joint venture between Chubu Electric and Tepco, said it has agreed to sell the chilled fuel to EDF Trading, a unit of France’s EDF.

Under the deal, Jera, one of the world’s largest LNG buyers will sell about 1.5 million mt to EDF Trading at European LNG terminals for a period of approximately two and a half years beginning in June 2018, it said in a statement on Thursday.

The price of the chilled gas will be linked to European gas market prices and the volume sold can be “adjusted by JERA’s discretion”, the statement said.

This enables JERA to secure the flexibility to “correspond with the LNG demand fluctuation and also expand the opportunity for LNG trading business toward the future”.

JERA said it will continue to seek “such activity for the flexible structure of the LNG procurement, aiming to reduce the LNG price in Asia”.

The JV said in February this year that it expects to have 30-40 mtpa of contracted LNG volumes by 2030-31, compared with 40 mtpa now.

Jera said in its 15-year business plan it will be changing its LNG purchasing strategy as it is “building procurement and business development platforms capable of adapting to future fluctuations in fuel markets“.

The JV’s long-term LNG offtake volume will be at 35 mtpa as of July this year. However, Jera expects to reduce these volumes to 15 mtpa by 2030-31, according to its business plan.

Jera plans to replace these long-term LNG contracts with a “combination of highly flexible short-term/spot contracts and economically efficient/stable long-term contracts”.

The JV also aims to almost double the size of its LNG fleet to 30 vessels by 2030-31. Jera will operate a fleet of 16 LNG tankers as of July 2016, according to the business plan.

LNG World News Staff