TEPCO Agrees to Buy Lean LNG Shipped from Louisiana

The Tokyo utility company will buy about 800,000 tons of it annually starting in 2017 from an export facility to be built by Cameron LNG.

Tokyo Electric Power Company, TEPCO, announced Feb. 6 that it has agreed to purchase lean LNG from Mitsui & Co., Ltd. and is in final discussions with Mitsubishi Corporation for additional purchases from the U.S. Cameron Project, a natural gas liquefaction export facility that will be built in Hackberry, La. Cameron LNG, a subsidiary of Sempra Energy, signed agreements with Mitsui and Mitsubishi in April 2012 to develop the facility.

TEPCO owns the Fukushima Daiichi nuclear power plant that was heavily damaged, with meltdowns of some of its six reactors, after a March 2011 earthquake spawned a tsunami that devastated the area. With both of its nuclear power stations still shut down, TEPCO has planned alternative sources, including the procurement of as much as 10 million tons of lean LNG (LNG with a calorific value per unit volume that is lower than conventional LNG) per year.

The contracts with Mitsui and Mitsubishi would extend for 20 years.

"In addition to approx. 800,000 tons (annual) of lean LNG to be purchased from the Cameron Project, approx. 1.2 million tons (annual) will be committed through purchases from multiple sources, which will be a total of 2 million tons of lean LNG to be secured," according to TEPCO's news release. "We consider this as the first step towards achieving the target of 10 million lean LNG. Upon introducing lean LNG, the operation of our receiving terminals will be reviewed and the facilities will be modified in order to achieve more flexible and stable operations of lean LNG procurement while making efforts to achieve diversification in supply sources and economical procurement. We will continue our efforts towards stable and reasonable power supply and stable procurement of economical fuels including lean LNG."

Cameron LNG received approval from the U.S. Department of Energy in January 2012 to export LNG from the Hackberry terminal to current and future Free Trade Agreement countries.

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