Tokyo Electric Power Company (TEPCO) and BP Singapore (BPS) have concluded a sale and purchase agreement (SPA) for LNG.
Under the agreement, TEPCO will purchase up to 1.20 million tpa of LNG over 17 years from BPS, commencing in April 2017.
The agreement states that TEPCO will receive LNG from BPS, supplied from multiple LNG sources, which BP Group holds (portfolio contract), and is the first long-term contract of its kind for TEPCO.
The agreement will enable TEPCO's steady purchase of LNG through diversification, since BPS will provide LNG from various supply areas. The supply features the inclusion of lean LNG1, of which TEPCO intends to increase its share, and also the inclusion of gas link (Henry Hub link2) for price indexation, which will contribute to TEPCO's aim of purchasing LNG at competitive price.
TEPCO has reviewed multiple supply sources, including those of US origin, in its strategy towards the annual purchase of approximately 10 million tons of lean LNG (half the amount of LNG purchasing). With this agreement, a total of approximately 2 million tpa of lean LNG will be secured.
- LNG having lower heating value per unit volume than conventional LNG.
- Henry Hub price: spot price at Henry Hub, located in the state of Louisiana, USA and used as price index of natural gas in USA
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/12092014/tepco-and-bp-singapore-in-lng-sales-agreement-1400/