JERA Enters Long-Term Deals to Buy Up To 5.5 MMtpa of US LNG

Six liquefied natural gas (LNG) projects in the United States have secured agreements with JERA Co. Inc. for the sale of up to 5.5 million metric tons per annum (MMtpa) over 20 years to the Japanese power utility.

JERA signed a sale and purchase agreement (SPA) for about two MMtpa from NextDecade Corp.’s Rio Grande LNG in Brownsville, Texas. The agreement is for train 5; NextDecade has yet to make an FID (final investment decision) on the fourth and fifth trains. The three-train first phase of the project is under construction. Rio Grande LNG holds a permit to export to FTA and non-FTA countries.

Another SPA involves around one MMtpa from Kimmeridge’s proposed Commonwealth LNG in Calcasieu Pass, Louisiana. In February the Department of Energy (DOE) granted the project a conditional permit to export to countries with no free trade agreement (FTA) with the U.S. Kimmeridge expects to make an FID in the third quarter of 2025 and start production 2029.

JERA also signed an SPA with Venture Global Inc.’s CP2 LNG in Cameron Paris, Louisiana, for approximately one MMtpa. The project recently started site work after completing clearance from the Federal Energy Regulatory Commission. In March the DOE granted a conditional permit for CP2 LNG to export to non-FTA countries. The project has already secured authorization for its export volume when it received FTA approval April 2022.

Meanwhile Sempra’s Port Arthur LNG phase 2 in Jefferson County, Texas secured heads of agreement with JERA for about 1.5 MMtpa. Late last month the DOE granted Port Arthur LNG Phase a non-FTA permit, marking the resumption of the issuance of final orders for LNG export following the previous administration’s pause.

JERA also penned heads of agreement with Cheniere Energy Inc.’s Corpus Christi LNG and Sabine Pass LNG. Train 3 of Corpus Christi was recently commissioned. Sabine Pass LNG, in production since 2016, is planned for expansion; the expansion project has yet to reach an FID.

“The Agreements broaden JERA group’s LNG portfolio and allow JERA Global Markets – the exclusive LNG optimizer and market access provider to JERA – to use its proven capability to better match supply-demand fluctuations, enhance cost competitiveness, and strengthen LNG supply stability across Asia in support of broader energy transition efforts”, JERA said in a press release.

U.S. Energy Secretary Chris Wright, who jointly announced the agreements with the companies in Washington, said in an online statement, “Today’s announcement of investments in American energy that will unlock nearly a quarter trillion dollars in U.S. GDP is a massive milestone and a bold demonstration of President Trump’s leadership”.

JERA said, “Through long-term offtake commitments, the Agreements are expected to support economic activity that could contribute approximately $200 billion to U.S. GDP and sustain 50,000 jobs annually, according to S&P Global analysis. The total value of these transactions also surpasses JERA’s cumulative equity investment in the United States, which currently stands at $6 billion”.

JERA Global chief executive and chair Yukio Kani commented, “After more than 15 months of strategic evaluation and commercial engagement, we are pleased to finalize the Agreements with U.S. suppliers, which offer unique flexibility and reliability – essential elements in our diversification strategy”.

“These agreements strengthen Japan’s energy security, reaffirm the U.S.’s leading role in the global LNG market, and support long-term sustainable economic development for both countries”, Kani added.

To contact the author, email jov.onsat@rigzone.com