JERA secures 20-year US LNG deals worth $200b to American economy
Japan's largest power generation company, JERA, has finalised agreements to purchase up to 5.5 million tonnes of liquefied natural gas annually from the United States over 20 years, in deals expected to contribute approximately $200 billion to US GDP.
The milestone agreements were announced at the US Department of Energy headquarters in Washington, with US Interior Secretary Doug Burgum and Energy Secretary Christopher Wright in attendance alongside Japan's Ambassador to America.
According to S&P Global analysis, the long-term offtake commitments are expected to support economic activity contributing approximately $200 billion to US GDP and sustaining 50,000 jobs annually. The total value of these transactions also surpasses JERA's cumulative equity investment in the United States, which currently stands at $6 billion.
The deals include sales and purchase agreements with NextDecade Corporation and Commonwealth LNG, as well as heads of agreement with Sempra Infrastructure and Cheniere Marketing. All contracts feature competitive pricing and flexible terms with no destination restrictions, allowing JERA to optimise shipping routes across the Asia-Pacific region.
"As Japan's largest power provider, JERA plays a central role in securing the country's energy future," said Yukio Kani, JERA's global CEO and Chair. "These agreements strengthen Japan's energy security, reaffirm the US' leading role in the global LNG market, and support long-term sustainable economic development for both countries."
The agreements deliver several strategic benefits for JERA and Japan:
- Price stability: Long-term contracts will shield Japanese consumers from energy market volatility, providing stable pricing into the 2040s and beyond.
- Demand flexibility: The deals enable stable supply during seasonal fluctuations caused by renewable energy expansion globally.
- Trading optimisation: The expanded portfolio allows JERA Global Markets to better match supply-demand variations and strengthen LNG stability across Asia.
As reported in a Reuters article, Kani noted that "cost-competitive and flexible LNG is essential as we look towards the 2030s," particularly given rising power demand from data centres. The deals build upon JERA's existing US operations, which include contracts totaling 3.5 million tonnes per year from Freeport LNG and Cameron LNG.
Japan's Ministry of Economy, Trade and Industry (METI) welcomed the agreements, stating: "Securing a stable and flexible LNG supply for thermal power generation is vital to Japan's energy security. METI welcomes Jera's long-term agreements with US suppliers—key partners to Japan—as an important step toward this goal."
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