JERA LNG Portfolio Strategy (LPS) has been established by the Japanese energy giant.
Based in Singapore, LPS is described as a strategic base to maximise the value of JERA’s LNG portfolio.
To achieve a stable supply of affordable energy, an optimal LNG portfolio will be built up that takes into account stability, economic efficiency, and flexibility, the company said.
About 50 years ago, Japan became the world’s first country to start commercial use of LNG.
However, 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.
In line with these trends, many global LNG players are moving into Singapore, which is now an emerging centre of LNG trading in Asia.
As market complexity 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, the company further explained.
To address these challenges, JERA LPS was established as a new company with expertise and experience in both LNG market analysis and the fields of commerce, law, and negotiation.
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.
