TOKYO - Japan's JERA Co, the world's biggest liquefied natural gas (LNG) buyer, says it has entered into a sales and purchase memorandum of agreement on LNG supply with Abu Dhabi Gas Liquefaction Company Ltd
The agreement is for smaller volumes and for a shorter period than its previous deal with the company
JERA, a fuel joint venture of Tokyo Electric Power Co and Chubu Electric Power Co, said in a statement it would buy up to eight cargoes of LNG, or up to 0.5 million tonnes, per year of LNG for three years starting April 2019.
JERA says the agreement was in line with the Japan Fair Trade Commission ruling in June 2017, which declared the destination restriction clauses to be anti-competitive and called for destination flexibility in LNG contracts.
JERA currently has a 25-year long-term LNG contract with Abu Dhabi expiring in March 2019, under which it buys 4.3 million tonnes per year.
The shorter duration and smaller volumes in the new deal, highlight the changes that have occurred in the LNG market in the past few years. (Reporting by Osamu Tsukimori; Editing by Christian Schmollinger)
© Reuters News 2018