Venture Global and Tokyo Gas Sign 20-year LNG Supply Deal

Venture Global, a U.S. LNG exporter, has signed a deal for Tokyo Gas to receive 1 million metric tonnes per year (mtpa), starting in 2030.

Venture Global has now signed its fourth long-term LNG contract with a Japanese firm. The U.S.-based company announced in a Wednesday statement that it had signed LNG long-term contracts totaling 7.75 mtpa over the past six months.

This move shows that Japan is increasing its energy purchases from the United States, while President Donald Trump pushes for increased U.S. exports of LNG to support domestic producers as well as improve trade balances with Japan.

The Japanese LNG industry is once again in the spotlight as the rise in artificial intelligence and the rising cost of cleaner energy, along with a new energy plan, drive the appetite for long-term LNG contracts.

Venture Global is America's second largest LNG exporter. The U.S. is the largest exporter in the world of super-chilled natural gas.

Since the Russian invasion of Ukraine 2022, global LNG demand has surged. Buyers in Europe and Asia have secured long-term supply agreements with U.S. suppliers.

Japan, which is the second largest LNG importer in the world after China, seeks stable and flexible energy sources to support its expansion of data centers.

Japanese buyers prefer U.S. supplies because they are more flexible and don't have destination clauses. They also want to reduce their dependence on Australia and Russia.

Tokyo Gas stated in a separate press release that "Through this purchase, we will diversify LNG suppliers, secure flexible and destination-free conditions, and help ensure stable feedstock acquisition and expand our LNG trade."

The financial terms of the Venture Global/Tokyo Gas agreement were not disclosed.

Venture Global has signed a 1-mtpa contract with Mitsui & Co., which follows a 2023 agreement with JERA.

JERA's announcement of 5.5 mtpa and Kyushu Electric Power’s 1 mtpa agreement bring Japan's LNG purchases announced this year to at least 8.5 million tons. In 2024, Japan will import a total amount of approximately 66 million tonnes of LNG. (Reporting from Pranav Mathur, Curtis Williams and Yuka Obayashi at Bengaluru; Editing by Alan Barona & Muralikumar Aantharaman).

(source: Reuters)