Japan’s JERA Co. said it has entered into a sales and purchase memorandum of agreement for liquefied natural gas (LNG) supply with Abu Dhabi Gas Liquefaction Company Ltd (ADNOC LNG).
The world’s largest buyer of LNG plans to purchase up to 8 cargoes per annum of LNG from ADNOC LNG for a period of three years starting April 2019, JERA, a fuel joint venture of Tokyo Electric Power Co and Chubu Electric Power Co, said in a statement.
The agreement is 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 believes this will contribute to its ability not only to respond to fluctuations in LNG demand, but also to optimise its LNG operations,” it said.
This agreement has a shorter duration and smaller volume compared to previous deals, reflecting a change in the LNG market in the past few years.
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.