As a result of discussing the purchase of LNG from the U.S. Cameron Project with the seller, Mitsui & Co., Ltd., Tokyo Electric Power Company (TEPCO) has agreed on the initial terms and conditions of the transaction. TEPCO is also in the final discussion with Mitsubishi Corporation to reach a basic agreement on the purchase of LNG from the project.
In accordance with the contracts, TEPCO will be purchasing approx. 800,000 tons annually and an optional amount (under discussion) of LNG starting from 2017 for the period of about 20 years. The natural gas linked price is planned to be applied to the price index for the first time in a TEPCO long-term LNG contract.
The Cameron LNG Project is being planned in the state of Louisiana by Cameron LNG, a subsidiary of Sempra Energy. Mitsui & Co., Ltd. and Mitsubishi Corporation are currently in discussion with Cameron LNG regarding a tolling agreement of processing natural gas including shale gas produced in the U.S.
Based on the policy "Develop action plans towards the introduction of a significant amount of lean LNG, including the LNG to be exported from the U.S, which will comprise about half of the entire procurement amount (maximum of 10 million tons/year)" which is stated in the "Intensive Reform Implementation Action Plan" developed last November, TEPCO considered multiple LNG supply sources including American LNG in order to achieve the introduction of lean LNG.
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 (annual) of lean LNG to be secured. TEPCO considers this the first step towards achieving the target of 10 million tons (annual) of lean LNG.