Brunei - Brunei signs pact with Japan's Tepco for 10-year LNG supply

BRUNEI has signed a Heads of Agreement (HOA) to renew a contract with the Japanese consortium, Tepco, for the supply of 3.4 million metric tonnes of liquefied natural gas (LNG) per year, for the next 10 years beginning April 2013, the Energy Minister said yesterday.

Online energy and metals news source, Platts, quoted Pehin Datu Singamanteri Colonel (Rtd) Dato Seri Setia (Dr) Hj Mohammad Yasmin Hj Umar following the HOA signing, saying that "the sales and purchase agreement will be signed by September this year".

Under the HOA, Brunei will supply about 3.4 million mt/year of LNG to Tokyo Electric Power Company, Tokyo Gas and Osaka Gas, the minister told Platts on the sidelines of the International Energy Forum (IEF) in Kuwait.

Brunei's renewed contractual supply volume will be reduced from the current contract, where Brunei is supplying 6.01 million mt/year, and is expiring in March 2013.

Before the devastating earthquake and tsunami that hit Japan on March 11, 2011, the minister said the consortium was only asking for one million mt/year following his visit to Japan in January 2011.

"Just after the tsunami, Japan asked for two million mt(/year) but we are giving them 2.4 million mt," he said.

When asked why the contract renewal would only be half that of its current 20-year contract, Pehin Dato Hj Mohd Yasmin said: "That's how the market is currently now. If you look at the market now, a lot of them are even shorter than 10 years."

The Energy Minister at the Prime Minister's Office (EDPMO) also said that both Brunei and Japan had asked for a shortened contractual period, and that the pricing is "acceptable for both parties".

In regards to the minister's meeting with Japan's Parliamentary Vice-Minister of Foreign Affairs, Joe Nakano, on the side of the IEF meeting, Pehin Dato Hj Mohd Yasmin said that they discussed bilateral cooperation and relationship.

"We are happy with the current bilateral relationship, and we are also committed to support Japan for any energy requirements in the future," he said.

Brunei was sixth largest LNG supplier to Japan in 2011, when it supplied 6.33 million mt, an 8.2 per cent from a year ago, as listed by Japan's finance ministry.

Japan is also the world's largest LNG importer, importing 78.53 million mt in 2011.

GOH DE NO

The Brunei Times

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