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Total lands LNG deal with Japan

By Daniel J. Graeber
French energy company Total signs agreement with Japanese utility company to supply it with super-cooled natural gas starting in 2019. File Photo by Stephen Shaver/UPI
French energy company Total signs agreement with Japanese utility company to supply it with super-cooled natural gas starting in 2019. File Photo by Stephen Shaver/UPI | License Photo

PARIS, July 22 (UPI) -- French energy company Total said Friday it landed a 17-year agreement to supply liquefied natural gas to the Japanese market starting in 2019.

Total signed a binding agreement with Japanese utility Chugoku Electric for the direct supply of LNG sourced from the French company's global portfolio.

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"Strengthening our presence in Japan, the world's largest LNG importer, through long-term cooperation with leading LNG buyers such as Chugoku Electric is a key component of Total's strategy," Laurent Vivier, the president of Total's gas portfolio, said in a statement.

Japan started taking on more natural gas to make up for the loss of nuclear power in the wake of the Fukushima Daicchi reactor meltdown in 2011. With the restart of some reactors, however, demand for gas could start moving lower on sector diversity and economic grounds.

The Organization Economic Cooperation and Development in June said Japan continues its economic contraction, slipping from 0.7 percent growth to 0.4 percent in 2017.

Nevertheless, Total said the supply agreement with Chugoku Electric is a milestone in that the company is one of the largest utility companies in Japan. The utility company signed up to receive up to 400,000 tons of LNG per year from Total.

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Total's U.S. counterpart Chevron this week signed an agreement with a Singapore holding company controlled by JOVO, a private energy company in China, for LNG deliveries. The Chinese government under the terms of the agreement will receive a half million tons of LNG per year over the next five years, with first deliveries slated for 2018.

The OECD said China is expected to slip from a growth rate of 6.5 percent in 2016 to 6.2 percent next year.

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