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(Bloomberg) — Qatar signed a 27-year deal to sell liquefied natural gas to Japan’s biggest utility, the first long-term supply accord between the two countries in more than a decade.
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Jera Co. will purchase about 3 million tons of LNG per year from QatarEnergy starting in 2028, according to an announcement in Doha Tuesday. Qatar supplied about 3.3 million tons of the fuel to Japan last year, compared with about 10 million tons in 2017, according to ship-tracking data compiled by Bloomberg. Bloomberg was first to report the deal.
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The binding agreement, one of the longest for a Japanese buyer in years, is a shot in the arm for Qatar, which had steadily lost business in Japan — the world’s second-largest LNG buyer — as the nation’s utilities opted for more flexible supply from rival exporters such as the US. Meanwhile, Qatar needs customers for its massive expansion, which will almost double export capacity to 142 million tons by 2030.
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“It ensures we remain fully aligned with Japan’s national policy and the energy transition goals, securing a stable and resilient energy future for the nation,” according to a statement from Jera.
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But Qatari LNG contracts have some of the strictest terms, like so-called destination clauses, that don’t allow for easy resale of supply. And with the future of Japanese gas demand uncertain due in part to potential nuclear reactor restarts, companies have been reluctant to commit to supply that can’t easily be traded or redirected.
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A Japanese company hasn’t signed an LNG purchase agreement with Qatar in more than a decade, according to data compiled by BloombergNEF. Jera decided not to renew a large purchase contract it had with Qatar when it lapsed in 2021, and has been in negotiations for new supply with the country for years.
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QatarEnergy also signed a non-binding agreement with Japan’s Ministry of Economy, Trade and Industry (METI) and Jera to supply Japan with additional LNG during emergency situations, according to a statement from Qatar.
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—With assistance from Shoko Oda and Tsuyoshi Inajima.
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(updates with detail from Jera statement starting in paragraph 4.)
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