Qatargas said on Monday it has entered into a new long-term agreement with its largest Japanese LNG buyer, Tokyo Electric Power Company (TEPCO), to provide liquified natural gas (LNG).
Under the first long-term bilateral agreement, signed by Dr Mohammed Bin Saleh Al-Sada, Minister of Energy and Industry and chairman of Qatargas, and Takao Arai, managing director of TEPCO, 1.0 million tonnes per annum (MTA) of LNG will be delivered on a long-term basis starting from this year.
The Tokyo electric board is one of the original eight Japanese buyers which signed a multi-party contract with Qatargas back in 1994. The Qatari company delivered its first shipment of LNG to Japan and TEPCO in 1997, with the start-up of the Qatargas 1 Project.
Qatar was Japan’s third largest exporter thanks to the sharp rise in its LNG supplies after the Fukushima earthquake and tsunami last year. The Japanese trade agency’s report suggested Qatari exports grew from around $21.6 billion in 2010 to $30.05 billion in 2011. The gas-rich Gulf nation’s exports to Tokyo were less than $10 billion in 2009.
Reports suggest Japan, the biggest LNG buyer in the world, is paying a record price to attract LNG supplies after it shut down all 54 of its nuclear plants after the earthquake and tsunami in March last year that caused the Fukushima Dai-Ichi disaster.
“Having continuously been provided with the smooth and stable delivery from Qatargas since its first cargo received, we are confident that today’s execution of the contract between Qatargas, the world’s largest LNG supplier, and TEPCO has further deepened the good relationship between the two companies and will greatly contribute to our future stable procurement of LNG,” Takao Arai, Managing Director, TEPCO, said.
Qatargas will supply approximately 2 million tonnes of LNG, 5% of Qatargas’ total production capacity, to TEPCO in 2012 under the new agreement together with existing arrangements.