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Venture Global LNG has signed a 20-year deal to sell 1 million tons per year of liquefied natural gas from its upcoming CP2 LNG export facility in Louisiana to Japanese customer JERA, the U.S. LNG exporter said on Friday.
The CP2 LNG export terminal will be located on a site adjacent to Venture Global LNG's operating Calcasieu Pass LNG facility in Cameron Parish, Louisiana. CP2 LNG, Venture Global's third export project, is expected to commence construction later this year.
Venture Global has already announced Sales and Purchase Agreements (SPAs) for over a third of the 20 million tons per annum (MTPA) nameplate facility, with active discussions ongoing for the remainder of its capacity, the U.S. exporter said.
"Venture Global is thrilled to be expanding our partnership with JERA, one of the world's premiere energy providers and largest buyers of LNG," said Mike Sabel, chief executive of Venture Global LNG.
Sunao Nakamura, Senior Managing Executive Officer, Optimization of JERA, commented, "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."
At the end of last year, Japan's INPEX Corporation signed a 20-year deal with Venture Global to buy LNG from CP2 LNG for 20 years, as both Asian customers and U.S. developers are seeking long-term agreements.
China Gas Holdings signed earlier this year 20-year LNG purchase deals with Venture Global to buy LNG from the Plaquemines LNG and CP2 LNG projects beginning in 2027.
Securing long-term deals is a major milestone for developers of U.S. LNG export infrastructure who seek decades-long purchase agreements to show certainty in their customer base when calculating development costs and the need to borrow funds.
In recent months, signs have started to emerge that cost inflation and increased competition to secure long-term buyers and financing could hold back some of the more than a dozen proposed LNG export projects in the United States.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.