Sale and Purchase Agreement for LNG from BP Singapore-Introducing "Portfolio contract" for the first time in a long term contrac

abarrelfull wrote on 15 Sep 2014 13:36
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Tokyo Electric Power Company (TEPCO) and BP Singapore Pte. (BPS, an affiliate of BP Group) today announced the conclusion of a Sale and Purchase Agreement for liquefied natural gas (LNG).

Under the agreement, TEPCO will purchase up to 1.20 million tons of LNG per year over 17 years from BPS, starting 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 LNG note(1), of which TEPCO intends to increase its share, and also the inclusion of gas link (Henry Hub link note(2)) 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 concluded with BPS, a total of approximately 2 million tons of lean LNG per year will be secured.

In addition to introducing multiple supply sources and diversification of price indexation, TEPCO will continue to strive towards the steady and economical purchase of fuel through comprehensive business alliances in order to meet its responsibilities as an electricity supplying company.

Note (1) Lean LNG: LNG having lower heating value per unit volume than conventional LNG
Note (2) 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

For a details of TEPCO's LNG Terminals

• Sale and Purchase Agreement for LNG from BP Singapore-Introducing "Portfolio contract" for the first time in a long term contract and lean LNG and Henry Hub link for price indexation

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