Mitsui, Mitsubishi and NYK to Invest in $10 Billion LNG Project

Mitsui & Co. (8031), Mitsubishi Corp. (8058) and Nippon Yusen K.K. (9101) will jointly take a one-third stake in a U.S. liquefied natural gas export facility to be built for as much as $10 billion as Japan seeks to tap cheaper shale gas following the Fukushima nuclear disaster.

Mitsui, Japan’s second-biggest trading company, and a venture formed by Mitsubishi and Nippon Yusen, the country’s largest trader and shipping line, will each hold a 16.6 percent stake in the Cameron LNG terminal in Hackberry, Louisiana, the companies said in separate statements that also disclosed they reached a 20-year accord to buy fuel from the facility. San Diego-based Sempra Energy will retain 50.2 percent of the project and France’s GDF Suez SA will take the remainder.

The agreement is another sign of efforts by Japanese traders and gas companies to secure energy supplies after the 2011 earthquake and tsunami prompted the shutting of all but two of the nation’s atomic reactors.

“Global demand for natural gas and LNG is expected to grow,” Tokyo-based Mitsui said today in a statement. “Mitsui will contribute to stable LNG production as well as stable energy supply to the global market, including Japan.”

Construction of the Louisiana facility is to begin next year with the first phase slated to start operating in the second half of 2017, Sempra said.

Details Provided

The announcement expands on a statement made by Sempra in April 2012 when the U.S. company said Mitsubishi and Mitsui agreed to help develop the Louisiana facility. Nippon Yusen has been added as a partner.

Japan is battling with rising costs as it seeks to secure alternative fuels. Japan said on March 15 that it wants to be included in the Trans-Pacific Partnership trade agreement, which now encompasses 11 nations in Asia and the Americas.

The spot price for gas in Louisiana finished trading yesterday at $3.932 per million British thermal units. Japan, the world’s largest gas importer, paid an average of $16.810 in February, according to the latest available Finance Ministry data compiled by Bloomberg.

Japan would need U.S. approval to import cheaper shale gas. Sempra’s Cameron project last year won permission to ship as much as 12 million tons a year to countries with which the U.S. has a free-trade agreement, the company said. Approval to export to countries that don’t have free-trade agreements is under review, the statement said.

Sumitomo Corp. said in April last year that it and Tokyo Gas Co. agreed to buy 2.3 million metric tons of liquefied natural gas annually for 20 years from Dominion Resources Inc.’s Cove Point project. 

To contact the reporter on this story: Masumi Suga in Tokyo at msuga@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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