JERA Establishes a Strategic Base to Maximize the Value of its LNG Portfolio2022/04/01

JERA Co., Inc. (“JERA”) established JERA LNG Portfolio Strategy Pte. Ltd. ("JERA LPS"), which started operations today, in Singapore as a strategic base to maximize the value of JERA’s LNG portfolio.

To achieve a stable supply of affordable energy, JERA aims to maximize the value of its LNG portfolio by building an optimal LNG portfolio that takes into account stability, economic efficiency, and flexibility.

About 50 years ago, Japan became the first country in the world to start commercial use of LNG. Today, LNG is positioned as an indispensable energy source worldwide. 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 commoditization, improved spot market liquidity, and greater market price volatility.

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.

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.

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, analyzing the LNG market based on the latest information, and formulating JERA’s LNG portfolio strategy.

Through JERA LPS, JERA will strive to maximize the value of its LNG portfolio while contributing to the development of a healthy LNG market and to the stable supply of affordable energy.

Outline of JERA LPS