Tokyo Gas and Shell Eastern Trading entered into a Heads of Agreement (HOA) for LNG supply, covering 10 years for 0.5 million tons per annum (MTPA). According to the agreement, Shell will provide LNG to Tokyo Gas from its worldwide LNG sources, not from particular facilities.
Tokyo Gas has been a stable supplier for Japan for 50 years and will utilize the HOA to continue the long-term LNG supply.
The two companies developed a pricing formula that is linked to coal indices. Tokyo Gas’s Managing Executive Officer, Kentaro Kimoto stated, “With our long-term relationship and joint consideration, we were able to achieve an innovative agreement that would enhance further diversification of price indexation pursued by Tokyo Gas.” Executive Vice President at Shell, Steve Hill commented, “We are delighted to be partnering with Tokyo Gas and offering this innovative solution to meet their energy needs. Our broad portfolio enables us to provide reliable LNG supply as well as tailored solutions including flexible contract terms under a variety of pricing indices.”
