Japanese Firms Sign Long-Term Deals to Buy LNG from Oman

Three Japanese companies have signed long-term agreements with Oman LNG to import 2.35 million tons of liquefied natural gas (LNG) annually from the sultanate. According to an Oman News Agency report, Oman LNG has signed three binding sheet agreements with Japan’s biggest power generation company JERA Co and trading firms Mitsui & Co and Itochu Corporation for the production and delivery of LNG starting from 2025. Total volumes of LNG to be delivered is 2.35 million metric tons per annum (MTPA).

These agreements will see Oman LNG supplying LNG based on contracts varying from five to ten years. The amount of LNG to be delivered is as follows: 0.8 MTPA to Itochu Corporation, 0.8 MTPA to JERA Co and 0.75 MTPA to Mitsui & Co. H E Eng Salim Nasser al Aufi, Oman’s Minister of Energy and Minerals and Nishimura Yasutoshi, Japan’s Minister of Economy, Trade and Industry were present during the signing ceremony in Muscat.

The agreements were signed by Hamad al Nu’amani, CEO of Oman LNG, Tetsuya Yamada from Itochu Corporation, Hitoshi Nishizawa from JERA Co and Motoyasu Nozaki from Mitsui & Co. These new deals come as a significant milestone for Oman LNG, as it complements the company’s strive to renew its contracts with a strong interest to leverage partnership with Japan.

H E Aufi said that the agreements were signed after the end of the current contracts. The new contracts take into consideration the notes submitted to the Ministry of Energy and Minerals regarding the previous MoUs and agreements. The notes were submitted by the State Audit Institution (SAI) and the Shura Council.

On his turn, Nu’amani pointed out that this move complements Oman LNG’s efforts to further grow, reach international markets and explore new opportunities. It will also leverage the enhanced production and Oman LNG’s nationwide commitment towards diversifying the economy, while ensuring economic growth, he added.

Japan’s JERA Co, in a statement on its website, said that based on the key term sheet agreement, it will purchase up to 12 cargoes (approximately 0.8 million tons) per year of LNG produced from the Oman LNG project from 2025 for 10 years. ‘LNG procurement competition has been intensifying and thus, stable procurement of fuel in a timely manner in line with the domestic electricity supply-demand situation is needed to secure a stable supply of energy in Japan,’ JERA Co said.