Japan signs new LNG contracts with Oman and US

Japan's main oil and gas corporation, Inpex Corp., has signed a deal to purchase 1 million tons per year from Venture Global LNG's CP2 project in Louisiana for 20 years. Construction of CP2 is scheduled to begin in the coming year.

Companies such as Mitsui & Co., Itochu Corp. and Japan's largest power producer Jera Co. will agree with Oman on the purchase of 2 million tons of LNG from 2025 for 10 years.

Against the background of fuel shortages, the Japanese government is reviewing ways to improve energy security. It is expected that global LNG supplies will remain limited for many years, which could increase import costs and exacerbate inflation.

This situation also means changes for Japanese LNG importers. Previously, they rejected long-term agreements, as they expected gas demand to reduce with the transition to cleaner energy sources. However, companies' dependence on the short-term spot market to secure LNG supplies has been significantly increased.

Nevertheless, high spot prices have caused Japanese firms to reverse course and lock in supplies for several years ahead at more attractive prices.