Japan’s Kyushu Electric Power said on Thursday it will sign a 20-year purchase contract with U.S. energy firm Energy Transfer to buy up to 1 million metric tons of liquefied natural gas a year from its Lake Charles LNG project.
It marks the Japanese utility’s first long-term LNG purchase deal from the United States and is expected to diversify the company’s procurement sources and contribute to stable supply, the company said in a statement.
A company spokesperson declined to disclose the contract’s terms or the timing of the signing, but said that imports are expected to start in 2030, if the project proceeds as planned.
Although Kyushu Electric had also considered investing in the Lake Charles project, the spokesperson said it ultimately decided against it, citing a “lower priority compared to other internal investment opportunities”.
The contract is on free-on-board (FOB) terms with no destination restrictions, allowing the utility to procure LNG flexibly in response to fluctuations in electricity supply and demand, such as adjusting receipt timing at its discretion or selling to other companies when demand is low.
Earlier this month, Energy Transfer said it was nearing a go-ahead on its Lake Charles LNG project after an unnamed Japanese company agreed to buy 1 million metric tonnes of LNG from the proposed export facility.
Energy Transfer said at that time it had 10.5 MTPA of its targeted 16.5 MTPA in committed LNG sales and that it was confident it could reach a final investment decision by the end of the year.
U.S. President Donald Trump has pushed allies
like Japan and South Korea to buy U.S. oil and gas while threatening tariffs on their exports.
When asked whether Kyushu Electric had received a request from the Japanese government to purchase U.S. LNG, the company spokesperson said it had not.
(Reporting by Yuka Obayashi; Editing by Janane Venkatraman and Joe Bavier)