BP and Tokyo Electric Power Company (TEPCO) today signed a sales and purchase agreement for liquefied natural gas (LNG).
Under the agreement, TEPCO will purchase from BP up to 1.2 million tonnes of LNG per year (mtpa) for 17 years starting in 2017.
BP will supply TEPCO with LNG from its diverse portfolio of LNG sources. This is the first long-term portfolio contract for TEPCO. It is also BP’s first long-term contract with TEPCO where BP is the sole supplier.
The agreement provides for Henry Hub pricing indexation, along with the supply of LNG with low calorific content, and as such is consistent with TEPCO’s strategy to diversify both its pricing indexation and supply sources. By allowing for supply from multiple LNG sources, the agreement supports BP’s upstream developments as well as BP’s supply arrangements from sources such as the Freeport LNG project.
Paul Reed, Chief Executive of BP Integrated Supply and Trading, said: “BP greatly appreciates the opportunity to work with TEPCO in implementing this innovative agreement. Furthermore, we look forward to working closely with TEPCO on future sales opportunities, as it develops its new business model.”
Date: Sep 12, 2014