JERA’s long-term offtake commitments propel US LNG projects toward FID

Japan’s energy major JERA has finalized multi-year agreements with four U.S. players relating to the purchase of liquefied natural gas (LNG) from the country’s export projects in a bid to fortify Asia’s energy security.

The deals include sales and purchase agreements (SPAs) with NextDecade Corporation and Commonwealth LNG, as well as heads of agreement (HoA) with Sempra Infrastructure and Cheniere Marketing.

The Japanese player says the 20-year agreements are in line with its long-term strategy to build a diversified and resilient LNG procurement portfolio in support of stable, secure energy for Japan and Asia. 

Under these, the Japanese major will procure up to 5.5 million tonnes per annum (mtpa) of LNG from the United States. The deals’ total value is said to exceed JERA’s cumulative equity investment in the North American country, which amounts to $6 billion.

This is said to be the largest U.S. LNG offtake by a single buyer to date, and Japan’s largest ever from the United States since the country first imported LNG from Alaska in 1969.

All volumes will be delivered on a free on board (FOB) basis with no destination restrictions. JERA believes this will help it optimize shipping routes and respond flexibly to evolving market conditions and LNG demand across the Asia-Pacific region.

The event announcing the deals was held at the U.S. Department of Energy headquarters in Washington, D.C., on June 12. It was attended by U.S. Secretary of the Interior Doug Burgum, Energy Secretary Christopher Wright, and Ambassador of Japan to the United States of America, Shigeo Yamada, among others. 

JERA Global CEO and Chair Yukio Kani said: “After more than 15 months of strategic evaluation and commercial engagement, we are pleased to finalize the Agreements with U.S. suppliers, which offer unique flexibility and reliability – essential elements in our diversification strategy.

“These agreements strengthen Japan’s energy security, reaffirm the U.S.’s leading role in the global LNG market, and support long-term sustainable economic development for both countries.”

The SPA with NextDecade, which entails 2 mtpa from Train 5 at the Rio Grande LNG (RGLNG) project, for 20 years, was announced in late May. The deal is subject to a positive final investment decision (FID) being taken on Train 5.

The non-binding HOA with Sempra for 1.5 million tonnes per annum (mtpa) of LNG is tied to the Port Arthur LNG Phase 2 development project in Jefferson County, Texas.

“We are pleased to collaborate with JERA, Japan’s largest power generation company and one of the world’s largest LNG buyers, as they continue to work with the United States to diversify their sources to help strengthen the resilience and dependability of their energy supply,” said Justin Bird, CEO of Sempra Infrastructure.

The U.S. player is targeting a final investment decision (FID) for Port Arthur LNG Phase 2 this year, once the necessary permits and funding, among other things, are secured.

With a nameplate capacity of approximately 13 mtpa, the Trains 1 and 2 forming part of Port Arthur LNG Phase 1 are expected to come online in 2027 and 2028, respectively. The groundbreaking ceremony for Port Arthur LNG Phase 1 was held in March 2024.

As part of Phase 2, Sempra proposes to expand the liquefaction-export project with Trains 3 and 4, which could double the total nameplate capacity of the facility to up to 26 mtpa.

The next deal, an SPA with Commonwealth LNG, encompasses the Japanese player’s purchase of 1 mtpa of LNG for 20 years from the 9.5 mtpa Commonwealth LNG liquefaction and export facility currently under development in Cameron, Louisiana.

“We look forward to our partnership with JERA, a recognized global energy leader who shares our commitment to low-cost energy with the lowest carbon footprint,” said Ben Dell, Managing Partner of Kimmeridge and Chairman of Commonwealth LNG. 

The SPA will become fully effective once customary conditions are met, including a positive FID for the project, targeted for Q3 2025. Following this, the first LNG production is expected in 2029. Commonwealth says 4 mtpa from the facility has been booked under long-term agreements.

A 20-year deal with an undisclosed buyer, described as a major Asian energy company, to buy 1 mtpa of LNG for 20 years from the future facility, was announced in early May.

Located on the west bank of the Calcasieu Ship Channel, near Cameron, Louisiana, Commonwealth LNG is set to have five 50,000-cubic-meter (cbm) storage tanks, accommodating vessels up to 216,000 cbm.

The developers expect the facility to unlock approximately $11 billion in total investments in Louisiana and an estimated $3.5 billion in annual export revenue. Furthermore, around  2,000 workers are expected at the peak of construction, providing 275 jobs when the facility begins operations in 2029.

The deal with Cheniere is related to the Corpus Christi LNG facility in Texas and the Sabine Pass LNG facility in Louisiana. Based on information from JERA, the HOA’s term is more than 20 years, and it will entail up to 1 mtpa of LNG.

The six-train Sabine Pass facility, which has been in liquefaction mode since 2016, currently has a 30 mtpa LNG production capacity, processing over 4.7 billion cubic feet per day of natural gas into LNG, which is stored in five tanks.

As part of the Stage 5 expansion project, Cheniere proposes to boost this by adding two large-scale liquefaction trains, each with a nameplate capacity of approximately 7 mtpa and a maximum production capacity of approximately 8.43 mtpa.

Cheniere’s Corpus Christi Liquefaction facility has four fully operational trains with an aggregated nominal production capacity of around 16.5 mtpa of LNG.

The U.S. player plans to expand this by adding seven ​midscale trains that will add more than 10 mtpa of production capacity, bringing CCL’s total permitted capacity to more than 25 mtpa. The first LNG from Train 1 as part of Stage 3 was produced in December 2024, with substantial completion reached in March 2025.

Two additional midscale trains as part of this stage are expected to achieve substantial completion in 2025, and the remaining four in 2026.

Additionally, Cheniere is developing two more midscale trains (Train 8 and 9) with an expected total production capacity of approximately 3 mtpa of LNG next to the CCL Stage 3 project. A positive environmental assessment from the Federal Energy Regulatory Commission (FERC) was received in 2024, and the U.S. player hopes to get all remaining necessary regulatory approvals for the project this year.