Japanese trading house Mitsui has agreed to purchase 1mn t/yr of LNG from US LNG producer Venture Global for 20 years from 2029, Venture Global announced on 11 November.
Mitsui and Venture Global signed a binding long-term LNG sales and purchase agreement. The deal is on fob basis, but Mitsui declined to disclose the detailed contract prices. Mitsui also did not state which projects the contract is tied to, as well as the export ports. Mitsui plans to deliver LNG to various regions including Japan, Asia and Europe.
Mitsui decided to buy LNG from Venture Global on expectations that LNG demand for power generation will continue growing until 2050, along with renewable power expansion. Renewable power needs thermal power as back up because its output is unstable, depending heavily on weather conditions.
Long-term LNG purchase contracts have been increasingly important because they would help reduce Japan's reliance on spot purchases, while mitigating the risk of surplus. Japan could minimise its average import costs of LNG by securing 60mn t of the fuel under long-term deals in the April 2040-March 2041 fiscal year, assuming demand ranges 53mn-74mn t, according to estimates from the country's natural resources and energy agency under the ministry of economy, trade and industry (Meti).
Meti will also add at least one cargo of LNG spot purchase each month as part of the country's Strategic Buffer LNG (SBL) reserve scheme, starting from January 2026. Meti aims to secure stable LNG supply on the back of rising geopolitical tension.
