BP and Tokyo Electric sign 17-year LNG deal
TOKYO – BP and Tokyo Electric Power Company (TEPCO) today signed a sales and purchase agreement for liquefied natural gas (LNG).
Under the agreement, TEPCO will purchase from BP up to 1.2 million tonnes of LNG per year (mtpa) for 17 years starting in 2017.
BP will supply TEPCO with LNG from its diverse portfolio of LNG sources. This is the first long-term portfolio contract for TEPCO. It is also BP’s first long-term contract with TEPCO where BP is the sole supplier.
The agreement provides for Henry Hub pricing indexation, along with the supply of LNG with low calorific content, and as such is consistent with TEPCO’s strategy to diversify both its pricing indexation and supply sources. By allowing for supply from multiple LNG sources, the agreement supports BP’s upstream developments as well as BP’s supply arrangements from sources such as the Freeport LNG project.
Paul Reed, Chief Executive of BP Integrated Supply and Trading, said: “BP greatly appreciates the opportunity to work with TEPCO in implementing this innovative agreement. Furthermore, we look forward to working closely with TEPCO on future sales opportunities, as it develops its new business model.”
Notes to editors
- Tokyo Electric Power Company is Japan’s largest electric utility, with 29 million customers and 35,000 employees. It was established in 1951.
- BP is active in many of the major LNG producing regions as well as in the main LNG markets. It is involved in LNG projects in Australia, UAE, Indonesia, Egypt, Trinidad and Angola.
- BP has a liquefaction tolling agreement for over 4.4 mtpa LNG capacity at the Freeport LNG Project in Texas, USA. The project plans to make a final investment decision later in 2014.
Cautionary statement
This press release contains certain forward-looking statements concerning BP’s expectations regarding the Sales & Purchase Agreement signed between BP and Tokyo Electric Power Company (TEPCO) for the supply of LNG, including expectations regarding future sales opportunities and the timing of the final investment decision for the project. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors including changes in public expectations and other changes to business conditions; the receipt of relevant third-party and or regulatory approvals; future levels of industry product supply; demand and pricing; economic and financial conditions generally or in various countries and regions; the timing and nature of maintenance outages; operational problems; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; regulatory or legal actions; the actions of competitors, trading partners and others; natural disasters and adverse weather conditions; wars and acts of terrorism, cyber-attacks or sabotage; and other factors discussed under "Principal risks and uncertainties" in our Stock Exchange Announcement for the period ended 30 June 2014 and under "Risk factors" in our Annual Report and Form 20-F 2013 as filed with the US Securities and Exchange Commission.
