Freeport LNG Signs 20-Year, 2.2 MTPA LNG Supply Deal with Japan’s Sumitomo

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Photo: Wojciech Wrzesien / Shutterstock

U.S.-based liquefied natural gas terminal operator Freeport LNG said it had signed a binding agreement with a U.S. unit of Sumitomo Corp to supply the Japanese company with 2.2 million tonnes of LNG per year for 20 years under a tolling structure (LTA).

Freeport LNG owns and operates an LNG terminal on Quintana Island, near Freeport, Texas. The terminal started LNG import operations in June 2008 and is scheduled to begin LNG export operations in 2019 with the commencement of commercial operations of the first of three liquefaction trains currently under construction.

The LTA is expected to start in 2023 once commercial operations begin at the fourth train (Train 4).

“We are pleased to announce the start of a long-term relationship with Sumitomo as our first Train 4 foundation customer,” said Michael Smith, Chairman and CEO of Freeport LNG. “Sumitomo’s significant U.S. gas trading and LNG operations makes it an especially great addition to our outstanding group of existing customers. Sumitomo’s 2.2 mtpa of capacity under this HOA is a major step toward Freeport LNG contracting the approximately 3.5 mtpa needed for financing and commencing construction of Train 4.”

Freeport LNG’s first three trains are expected to produce in excess of 15 million tonnes of LNG per year. Of this capacity, 13.9 mtpa has been contracted to Osaka Gas Trading & Export, LLC, JERA Energy America, LLC, BP Energy Company, Toshiba America LNG Corporation, SK E&S LNG, LLC., and Freeport LNG Marketing, LLC, which concluded the recently announced agreement with Trafigura PTE LTD. Freeport LNG’s limited partnership interests are ultimately held by Michael Smith, Global Infrastructure Partners, and Osaka Gas Co., Ltd.