SINGAPORE (ICIS)--Japanese utility Tokyo Gas will buy 0.8m tonnes per annum (mtpa) of LNG from US-based producer Sempra, the company said on 8 November, in one of three non-binding agreements secured by the California-based energy company to support its Energia Costa Azul (ECA) project on Mexico’s Pacific coast.
Sempra made a separate announcement on 7 November, saying that it has signed heads of agreement (HoA) terms with France-based oil major Total, Japanese trading house Mitsui and Tokyo Gas for the entire 2.4mtpa first phase of the Costa Azul project. The HoAs with Total and Mitsui are also for 0.8mtpa, Sempra said in a statement. The agreements are intended to form a base for 20-year supply deals after a final investment decision is taken on the Costa Azul project planned for 2023.
Given the shipping distances, the project’s position on Mexico’s west coast makes it an attractive site for volumes targeting northeast Asia and India. Total, which plans to increase its participation on the LNG markets in China and India, has been structurally short of volumes in the Pacific basin. Mitsui is likely to use the offtake to target its traditional customer base in Japan, but additional supplies are likely to increase options in the company’s supply portfolio.
Details on the pricing structure of the deal were not available at press time.
“These three HoAs mark a significant milestone for the development of the ECA liquefaction export-project, supporting Sempra Energy’s strategic vision of becoming North America’s premier energy infrastructure company,” said Joseph A. Householder, president and chief operating officer of Sempra Energy.