It has been reported that Japan's Hokkaido Gas is negotiating with JERA to buy LNG cargoes from April, 2027.
Hokkaido Gas issued a tender to buy two to four cargoes per year for seven years starting from April, of that year. The first round of the tender closed on 4th March.
Market sources said the buyer has only chosen JERA after a few shortlisting rounds.
Sources told Platts that Hokkaido Gas plans to buy two or three cargoes for the first two years and three or four cargoes for the remaining contract years. The price is linked to Brent crude.
They also said that the price level Hokkaido Gas and JERA were negotiating at was 12.7%-12.8% slope to Brent, which was considered competitive, given that Hokkaido Gas is purchasing more winter cargoes.
Japan's current term contracts are about 13.5%-14% slope to crude oil, according to industry sources.
Apart from Hokkaido Gas, other Japanese utilities were looking for new term contracts, as they expect existing contracts to expire in a few years, market sources said.
