• 6 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes Saudis Pull Hyperloop Funding As Branson Temporarily Cuts Ties With The Kingdom
  • 6 mins WTI @ $75.75, headed for $64 - 67
  • 4 hours Trump vs. MbS
  • 5 hours Saudi-Kuwaiti Talks on Shared Oil Stall Over Chevron
  • 9 hours The Dirt on Clean Electric Cars
  • 15 hours Uber IPO Proposals Value Company at $120 Billion
  • 6 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 22 hours UN Report Suggests USD $240 Per Gallon Gasoline Tax to Fight Global Warming
  • 5 hours EU to Splash Billions on Battery Factories
  • 19 hours COLORADO FOCUS: Stocks to Watch Prior to Midterms
  • 10 hours Coal remains a major source of power in Europe.
  • 6 hours Poland signs 20-year deal on U.S. LNG supplies
  • 16 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 18 hours Nopec Sherman act legislation
U.S. And Europe Divided On The Future Of Oil

U.S. And Europe Divided On The Future Of Oil

Oil majors in Europe and…

Oil Prices Under Pressure As U.S. Shale Supply Soars

Oil Prices Under Pressure As U.S. Shale Supply Soars

Continued production growth in the…

Japanese Utilities Step up LNG Purchases

To make up for the continued shortfall in electricity generation from the dozens of idle nuclear power plants, Japanese utilities are increasing their purchases of LNG from abroad. Tohoku Electric Power Co. announced on Feb. 4 that it signed a 15-year contract to buy LNG from Qatar. The deal, which begins in 2016, will allow for the import of 60,000 to 90,000 tonnes of LNG per year from 2016 to 2018, and 180,000 tonnes thereafter for the duration of the contract.  

This followed the agreement made by Toho Gas, which last week announced that it signed its first contract based on a link to Henry Hub prices rather than traditional oil-linked contracts. Toho signed a 20-year deal with Sempra LNG to take gas from the proposed US Cameron LNG project in Louisiana. The export terminal is awaiting the go-ahead from the U.S. Department of Energy. The project is notable because it is backed by a 33.2% combined stake from a consortium of Japanese companies, according to Platts. Mitsui, Mitsubishi and Nippon Yusen Kabushiki Kaisha went in together on the export project, the first time Japanese companies have done so in the U.S, and a sign that Japan sees the U.S. as an increasingly important source of LNG.

Related article: Is There Still Opportunity in the Natural Gas Space?

Last year Kansai Electric signed a 20-year deal to take LNG from the proposed Cove Point terminal on the Chesapeake Bay in Maryland. That project is facing blowback from environmental groups and has yet to receive approval. Still, Kansai’s deal was also linked to Henry Hub prices, an indication that as more U.S. LNG reaches global markets, the higher volume will slowly chip away at the practice of linking prices to the price of oil. And with Henry Hub prices much lower than the global price of oil on an energy-equivalent basis, Japanese companies feel confident that they will get a better deal.

By. James Burgess of Oilprice.com


x

Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News