The newly appointed chairman of the Japan Gas Association said Thursday that the recent approval by the US Department of Energy for LNG shipments from the Freeport LNG project in Texas to countries that do not have free-trade agreements with the US was "a major step forward."
While the project still needs separate approval from the Federal Energy Regulatory Commission, Japan's Chubu Electric and Osaka Gas could each get 2.2 million mt/year of US-sourced LNG under their natural gas liquefaction tolling agreement once Freeport gets the green light.
"We are hopeful that other applied projects will be approved one after another," Hiroshi Ozaki told a press conference in Tokyo after being appointed by the board of the association earlier in the day.
For Japan, which does not have an FTA with the US, the DOE approval on May 17 for the Freeport project has increased the reality of LNG imports, not just from a new supply source but also at a new pricing index -- Henry Hub gas prices, according to industry sources.
"We believe realization of importing US LNG at Henry Hub prices will not only diversify contractual terms but also become one card for negotiations," Ozaki said.
Ozaki's appointment came as Mitsunori Torihara said in March that he will step down as chairman of the association at its scheduled general meeting on June 13.
Ozaki is president of Japan's second-largest gas utility Osaka Gas, and Torihara is chairman of the largest gas utility Tokyo Gas.
