Kyushu Electric Power will sign a 20-year supply agreement to receive LNG from Energy Transfer’s Lake Charles export facility if its development proceeds as planned.
The supply deal will be Kyushu Electric Power’s first-ever agreement for LNG deliveries from the United States, which will help diversify the utility’s energy sourcing, the company said in a statement on Thursday carried by Reuters.
A spokesperson for Kyushu Electric Power told the newswire that the company had not been asked by the Japanese authorities to buy U.S. LNG, amid multiple pledges from Asian countries that they would look to buy more energy products from America to reduce their trade surpluses with the United States.
Earlier this month, Energy Transfer said it is targeting a final investment decision on its Lake Charles LNG export project in Louisiana by the end of the year as it is progressing with contracting LNG offtake volumes.
Energy Transfer is developing the project, which will convert its existing Lake Charles LNG import and regasification facility into an LNG export facility.
The Lake Charles LNG project is fully permitted, uses existing infrastructure, and benefits from an abundant natural gas supply through existing connections to the Henry Hub and connectivity to Energy Transfer’s vast network of natural gas pipelines, the company says.
Over the past weeks, Energy Transfer has signed several offtake agreements. It is currently in discussions for the remaining uncommitted LNG offtake volume and is targeting FID by year-end, co-CEO and CFO Thomas Long said on the Q1 earnings call in early May.
“We are making substantial progress towards commercialization of the project,” Long told analysts on the call.
On the other hand, Japan and other countries in Asia are rushing to commit to buying increased volumes of U.S. natural gas, oil, and fuels as they seek to negotiate favorable trade deals.
By Tsvetana Paraskova for Oilprice.com
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