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TOKYO—Japanese companies said they reached deals with Omani and U.S. producers for mid- to long-term natural-gas supplies, a move to lock up the fuel after turmoil this year caused by Russia’s invasion of Ukraine.
The deals signal the renewed importance of relatively stable producers of liquefied natural gas or LNG, including the U.S. Japan is among the world’s largest importers of LNG, alongside China, and relies on the fuel for nearly 40% of its electricity production.
Japan still imports LNG from Russia, which supplied 8.8% of its needs in 2021, but the Tokyo trading companies involved in the business have taken write-downs out of concerns that international sanctions or other issues could cut off the flow. Russia has already turned off the taps of its biggest natural-gas pipeline to Europe.
Three Japanese companies—
Itochu Corp.
,
& Co. and Jera Co.—have agreed to purchase a total of 2.35 million tons of LNG annually from Oman starting in 2025 for about 10 years, said
Yasutoshi Nishimura,
head of the Ministry of Economy, Trade and Industry, on a visit to Oman Tuesday. A ministry official said Japan aimed to lift its procurement from Oman to three million tons annually pending talks involving additional companies.
Representatives of Itochu and Mitsui confirmed talks with Oman but declined to give details. Jera said it agreed to import 800,000 tons of LNG annually from the Middle East nation for 10 years starting in 2025.
Oman is already a supplier to Itochu and other Japanese customers. Many of Oman’s contracts expire in 2024 or 2025. The Japanese official said competition was heating up for its supplies, in part because tankers departing from Oman don’t need to pass through the Strait of Hormuz, a frequent hot spot for tensions involving Iran.
Oman “has a big advantage from the perspective of stable supply because it tends to have less exposure to geopolitical effects,” said Mr. Nishimura. He said that “at a time when tight global supplies of LNG are expected,” the deals “have major significance for our country’s energy security.”
Meanwhile, Tokyo-based
Inpex Corp.
said it would purchase one million tons of LNG annually for 20 years from an export plant in Cameron Parish, La., under development by U.S.-based Venture Global LNG. The plant is set to begin construction next year. Venture Global also has supply deals with a German customer,
EnBW Energie Baden-Württemberg AG
, that says it wants to reduce dependence on Russia.
The Japanese companies didn’t disclose financial terms of the Oman and U.S. deals. In the first half of 2022, Japan imported 37.5 million tons of LNG and paid the equivalent of about $27 billion, according to government figures.
Japan has historically preferred long-term LNG procurement, a strategy that earned it criticism a few years ago when the fuel was cheaply available on the spot market but has paid off this winter when other nations are trying to secure high-price spot supplies.
Inpex, which is about 20%-owned by the Japanese government, said this was the first time it was buying LNG from the U.S. The company, which currently gets most of its LNG from an offshore field it operates in Australia, is aiming to raise its annual sourcing of LNG to 10 million tons by 2030 from seven million tons currently.
While Japan is aiming for carbon neutrality by 2050, meaning net zero emissions of carbon dioxide, an Inpex spokeswoman said the company believed demand for LNG, a fossil fuel, would continue for some time. “We need to contribute to stable supplies,” she said.
The METI official said some companies, including those making contracts with Oman, were looking for terms shorter than 20 to 25 years to avoid brushing up against the 2050 deadline.
Write to Peter Landers at Peter.Landers@wsj.com and Chieko Tsuneoka at chieko.Tsuneoka@wsj.com
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