Toho Gas to Buy LNG from Petronas

Toho Gas has entered into a basic agreement with a subsidiary of Malaysia's Petronas to buy LNG, the Japanese utility announced Tuesday.

The Japanese firm will buy from Petronas LNG Ltd. seven to nine LNG cargoes a year during the 10-year contract starting in April 2017, it said in a statement.

“We accurately keep track of any change in the environment for procuring energy, and strive for LNG procurement diversification, including diversification of the price-index, supply sources and types of contracts to ensure a stable energy supply to customers at a competitive price.  For the first time, we entered into a Heads of Agreement for a purchase of LNG by portfolio supply with the objective of flexibility of quantity and diversification of the price-index,” Toho Gas said.

The prices will be linked to crude and U.S. Henry Hub prices, with an option to change the destination on condition of obtaining the seller's prior consent.