PARIS, July 21 (UPI) -- French energy company Engie said Tuesday it was building its position in the liquefied natural gas market through a partnership with a Japanese power producer.
The French energy company, formerly known as GDF Suez, said it would purchase about half a million tons of LNG per year from Kansai's North American LNG beginning in 2019. The terms of the agreement extend for four years with an option to continue for another 20 years.
"This agreement underlines the value that Engie, as a major LNG player, can bring to utilities such as Kansai Electric through its diversified LNG portfolio, its capacity to trade on global LNG markets and its shipping experience," Philip Olivier, chief executive officer of Engie's global LNG division, said in a statement.
Kansai saves on transportation costs by selling LNG secured from the United States and in turn buying from closer reserves controlled by Engie.
Kansai made a similar deal with a subsidiary of British energy company BP in May.
Asian demand for natural gas is expected to grow by as much as 8 trillion cubic feet by 2020. The International Energy Agency said LNG, a super-cooled and denser product with more deliverability options, represents "a golden opportunity" for Asian economies.
Japan, the world's third largest economy, announced in February it exited two quarters of consecutive recession. Gross domestic product during fourth quarter grew by 2.2 percent, but the pace was subdued by a decrease in consumer spending.
Japan in particular has sought to diversify its energy sector in the wake of the Fukushima Daichii nuclear power disaster in 2011.