ROME/TOKYO, Dec 4 (Reuters) - Japanese oil refiner TonenGeneral Sekiyu is seeking to buy long-term supplies of liquefied natural gas (LNG) to feed a planned 2,000 megawatt power plant southwest of Tokyo, the company said on Friday.
The move may mark Japan’s first new 20-year LNG supply deal in years at a time when the country is struggling to handle a mounting glut of shipped gas as demand wanes.
It also comes as two South American importers move forward on awarding tenders for long-term supply of shipped gas.
“At present, we are in talks with a lot of prominent suppliers to win the best conditions that can be obtained from the market,” a TonenGeneral spokesman said.
LNG deliveries are expected to start sometime after 2020 for 20 years, two industry sources said, by which time analysts expect Japanese gas demand to have recovered.
Suppliers have been short-listed and a winner should be picked within the next few months, with a firm sales deal due to be signed by the middle of 2016, one of the sources said.
It was not possible to immediately confirm the identity of suppliers.
Pockets of long-term LNG demand are also emerging in other regions just as 170 million tonnes of new LNG supply ramps up, set to boost current global export capacity by more than half.
El Salvador is seeking a 12-year LNG supply deal for 500,000 tonnes of supply annually, indexed to oil prices at a percentage of around 12 percent, an industry source said.
A customer of Chile’s Quintero LNG import terminal is also holding a tender to secure multi-year supplies, sources said.
Additional reporting by Sarah McFarlane in Rome; Editing by Mark Heinrich