17-04-2012

Commercial development agreement with Cameron LNG to Liquefy Natural Gas in Louisiana

Mitsubishi Corporation has signed a Commercial Development Agreement with Cameron LNG, a subsidiary of Sempra Energy, to liquefy approximately 4 million metric tones of natural gas at Cameron LNG terminal. The agreement binds the parties to negotiate a 20-year tolling agreement, based on agreed-upon terms outlined in the Commercial Development Agreement. The intending tolling agreement will enable Mitsubishi Corporation to become a foundation customer of LNG produced at Cameron LNG terminal, and Mitsubishi Corporation will market them to overseas utility customers.
 
In recent years, due to the rapid increase of natural gas production in the United States, some LNG receiving terminals are planned to be converted to LNG export terminals by additionally building liquefaction facilities.
 
Cameron LNG receiving terminal in Hackberry is expected to start conversion in late 2013 with operations to commence in late 2016. The completed liquefaction facility will utilize Cameron LNG’s existing facilities, and is expected to be comprised of three liquefaction trains with a total export capability of approximately 12 million tonnes per annum (Mtpa) of liquefied natural gas (LNG). In January 2012, Cameron LNG received approval from the U.S. Department of Energy (DOE) to export up to 12 Mtpa of domestically produced LNG from the Cameron LNG terminal to all current and future Free Trade Agreement countries. The authorization to export LNG to countries with which the U.S. does not have a Free Trade Agreement is pending review by the DOE. Cameron LNG expects to receive the required permits from the Federal Energy Regulatory Commission (FERC) and enter into a turnkey contract in 2013 for engineering and construction services for the project.
 
Natural gas which Mitsubishi Corporation will procure from the North American natural gas market will be processed through the Cameron LNG facility pursuant to a tolling agreement for 4 Mtpa, which LNG will then be marketed to utility customers. To secure natural gas from the market in safely and cost competitive manner, Mitsubishi Corporation will utilize expertise of independent gas marketer CIMA Energy Ltd. (headquartered in Houston, Texas) which Mitsubishi Corporation holds 34% share.
 
Under a situation where Japan is currently importing LNG mainly from the Middle East and Southeast Asia, LNG import from the United States will contribute to diversification of energy resources and increase flexibility of supply plan by utilizing fluid North America’s natural gas market in parallel.