Japan's Osaka Gas offers LNG cargoes from US Freeport plant: sources
[TOKYO] Japan's Osaka Gas has offered two liquefied natural gas (LNG) cargoes for loading from the newly commissioned Freeport LNG project in the United States as it ramps up output, industry sources said.
Osaka has offered the cargoes from the project for delivery into Europe in July and November, two of the sources said.
Bids are due by Jan 22, they added.
An Osaka Gas spokesman declined to comment on the tender, but confirmed that the company's first cargo from Freeport, which loaded in December, went somewhere else apart from Japan, declining to give further details.
The Freeport project shipped its first LNG commissioning cargo for Train 1 from its liquefaction facility located on Quintana Island in Freeport, Texas in September, last year.
Osaka Gas and JERA Co, a joint venture between Tokyo Electric Power Co and Chubu Electric Power Co, are expected to each lift half of Freeport LNG Train 1's total contracted capacity of about 4.64 million tonnes per annum (mtpa).
Freeport has about 20-year liquefaction tolling agreements with Osaka Gas and JERA from Train 1. Under the deal, both companies will secure LNG without destination restrictions, helping them diversify supply sources and price indices, as well as enhance procurement stability and flexibility.
With a mild winter reducing Japan's appetite for LNG, Europe is the most likely destination for these cargoes given cheaper freight rates than to Asia, a Japan-based trader said.
Weaker-than-expected demand from North Asia and a flood of supply from the United States have already sent Asian spot prices spiralling below US$5 per British million thermal units (mmBtu).
Freeport is expected to load 11 cargoes in January, up from 7 which loaded in December, shiptracking data from Refinitiv Eikon showed.
REUTERS
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