Japan’s Tepco, BP sign 17-year LNG supply deal
9/15/2014 12:00:00 AM
Tokyo Electric Power Company (Tepco) and BP Singapore (BPS) have reported the conclusion of a sale and purchase agreement for LNG.
Under the agreement, Tepco will purchase up to 1.20 MMtpa of LNG over 17 years from BPS, starting in April 2017.
The agreement states that Tepco will receive LNG from BPS, supplied from multiple LNG sources which BP holds, and is the first long-term contract of its kind for Tepco.
The agreement will enable Tepco's steady purchase of LNG through diversification, since BPS will provide LNG from various supply areas, according to company officials.
The supply features the inclusion of lean LNG, of which Tepco intends to increase its share, and also the inclusion of gas link (Henry Hub link) for price indexation, which will contribute to Tepco's aim of purchasing LNG at competitive price.
Tepco has reviewed multiple supply sources, including those of US origin, in its strategy towards the annual purchase of approximately 10 MMtpa of lean LNG (half the amount of LNG purchasing).
With this agreement concluded with BPS, a total of approximately 2 MMtpa of lean LNG will be secured.
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