JERA and Woodside Energy reach agreement on winter supply during the winter months

The companies announced on Friday that Japan's largest power generator, JERA and Australia's Woodside Energy, have signed an agreement for Woodside Energy to supply JERA only with liquefied gas during the winter.

The Heads of Agreement were signed in Tokyo at the LNG Producer-Consumer Conference. This event was co-hosted jointly by the Japanese industry ministry and International Energy Agency.

A JERA spokesperson confirmed that Woodside would supply approximately 200,000 metric tonnes of LNG per year during the period December to February, beginning in the fiscal year 2027. The deal will last for five years.

Yuya Hasegawa, director of the Ministry of Economy, Trade and Industry, said that the agreement was unusual because it covered only three months of the entire year, instead of the full year, as a normal term contract would, at a recent press conference.

He said that the agreement would also provide flexibility. It will allow JERA to not take supplies when it is not needed due to warmer than usual winter conditions.

Hasegawa stated that the ministry hopes Japanese companies will consider similar deals with suppliers.

He said that if the problem spreads to more sources, this could lead to an increase in Japan's ability to maintain a stable supply.

JERA is Japan's biggest LNG buyer. It is a joint venture between Tokyo Electric Power (TEP) and Chubu Electric Power (CEP). (Reporting and editing by Joe Bavier, Yuka Obayashi in Tokyo and Kathleen Benoza and Emily Chow at Singapore)

(source: Reuters)