JERA, the world’s largest buyer of liquefied natural gas (LNG), has established a new subsidiary JERA LNG Portfolio Strategy in Singapore, which offers a strategic base to maximise the value of JERA’s LNG portfolio.
Japan’s JERA, a 50-50 joint venture between Tokyo Electric Power Company and Chubu Electric Power, said the new company started operations on Friday.
“The LNG environment has changed drastically over the past 10 years as LNG use has expanded, with increased complexity due to more intense competition, diversification of contract terms and price indices, increased commoditisation, improved spot market liquidity, and greater market price volatility,” JERA said in a statement.
“In line with this trend, many global LNG players are moving into Singapore, the emerging center of LNG trading in Asia where human resources and information gather,” added JERA.
“As market complexity has increased, some terms and conditions in long-term LNG sales and purchase agreements (“SPAs”) that JERA concluded in the past are no longer in line with actual conditions for either party. In addition, negotiating the revision of prices stipulated in long-term LNG SPAs requires the latest knowledge of and expertise in the LNG market,” said JERA.
To address these challenges, JERA has established JERA LPS in Singapore as a new company with expertise and experience in both LNG market analysis and the fields of commerce, law, and negotiation. JERA LPS will be responsible for negotiating revisions to terms and conditions and prices in JERA’s existing long-term LNG SPAs, analysing the LNG market based on the latest information, and formulating JERA’s LNG portfolio strategy.
Through JERA LPS, JERA said it will strive to maximise the value of its LNG portfolio while contributing to the development of a healthy LNG market and to the stable supply of affordable energy.
JERA, the largest power generation company in Japan, produces about 30% of the nation’s electricity.
Recommended for you
