US LNG exporter Venture Global LNG has signed a long-term liquefied natural gas supply deal with Japan’s LNG trading giant and power firm, Jera.
Under the sales and purchase agreement, Jera will buy 1 million tonnes of LNG per year for a period of 20 years from Venture Global’s proposed CP2 LNG terminal from the start of commercial operations.
“LNG procurement competition has been intensifying and thus, stable procurement of LNG in a timely manner in line with the domestic electricity supply-demand situation is needed to secure a stable supply of energy in Japan,” Jera said in a statement on Friday.
Jera said this is a destination free FOB contract, which enables the firm to secure LNG in a “high flexible manner”.
The firm expects this deal will help with its capability to respond to volatility in the domestic electricity supply and demand.
CP2 LNG construction to start later this year
Venture Global announced in December 2021 that it plans to invest more than $10 billion in the CP2 LNG terminal, which would be located next to its existing Calcasieu Pass liquefaction plant in Louisiana.
CP2 LNG includes a terminal with a nameplate liquefaction capacity of 20 mtpa.
The plant would have 18 liquefaction blocks, each with a capacity of about 1.1 mtpa of LNG, but also four 200,000-cbm full containment LNG storage tanks.
Venture Global said in a separate statement that it expects to start construction on its third LNG export plant later this year as the CP2 LNG project continues progressing through federal permitting process.
To date, the company has announced SPAs for over a third of the 20 mtpa nameplate facility with active discussions ongoing for the remainder of its capacity, it said.
Venture Global noted that this deal follows Jera Global Markets’ purchase of the inaugural commissioning cargo of LNG exported from Venture Global’s first project, Calcasieu Pass, on March 1, 2022.