JERA’s partial stake in US LNG project going to JAPEX

Japan’s power generation company JERA, a joint venture of two major Japanese electric power companies, TEPCO Fuel & Power Incorporated and Chubu Electric Power Company, has decided to offload a partial interest in a liquefied natural gas (LNG) export project located in the United States (U.S.) to optimize its asset portfolio.

Following its portfolio optimization assessment, JERA approved a proposed agreement with JAPEX (U.S.) Corp., a subsidiary of Japan Petroleum Exploration Co., Ltd. (JAPEX), to sell 15% of its interest in Gulf Coast LNG Holdings LLC (GCLH), a subsidiary of JERA Americas through which the Japanese firm holds an approximately 25.7% interest in Freeport LNG Development (FLNG), which operates the Freeport LNG project in Texas, United States.

This divestment will bring JERA approximately $380 million and the firm’s interest in FLNG will be equivalent to about 21.9% upon the completion of the sale. The agreement is expected to be executed in June 2024. JERA highlights that it will continue to contribute to the stable operation of the Freeport LNG project through its participation in FLNG.

Freeport LNG embarked on the development of the liquefaction project in 2010, with the construction phase following a few years later in late 2014. The three-train liquefaction facility has 15 mtpa liquefaction capacity.

With an additional LNG train (Train 4) under development, the facility will expand its capacity to over 20 mpta. Train 4 will use electric motors with variable frequency drive for the cooling and liquefaction compression power to curb emissions, just like the first three trains.

Recently, JERA disclosed a project framework agreement with ExxonMobil to jointly explore the development of low-carbon hydrogen and ammonia production in the United States. The Japanese firm also teamed up with Singapore’s Energy Market Authority (EMA) to jointly pursue LNG procurement and supply chains.