The logo of JERA Co., Inc., the world's biggest LNG buyer, is displayed at the company office in Tokyo, Japan July 14, 2017.

Japan's largest power generation company, JERA, has concluded its first long-term liquefied natural gas (LNG) export agreement with India's Torrent Power, the company announced on Monday.

Under the 10-year contract starting in 2027, JERA will supply four LNG cargoes per year on a delivered ex-ship (DES) basis to Torrent Power. The volumes will support Torrent's 2,730 megawatts of gas-fired power generation capacity and will also be distributed to residential customers, small industrial users, and the transportation sector in India.

"The partnership strategically leverages the complementary seasonal demand patterns of Japan and India," JERA said in a statement.

The arrangement allows JERA to optimise its global LNG fleet by redirecting volumes from Japan during the country's lower-demand winter and spring periods to meet India's peak requirements in the hot summer months.

JERA, a joint venture between Tokyo Electric Power Company Holdings and Chubu Electric Power, stated that the deal strengthens its position in the growing Asian LNG market while enhancing supply chain flexibility.

Moving forward, JERA plans to further expand and diversify its LNG procurement portfolio across the Middle East, wider Asia, and the United States to improve resilience against price fluctuations and supply disruptions.

This transaction marks JERA's entry into long-term LNG sales to the Indian market and reflects increasing cooperation between Japanese and Indian energy companies to ensure stable natural gas supply for power generation and end-user segments. The agreement is expected to contribute to energy security in India, where natural gas demand continues to rise alongside economic growth and the expansion of gas-based infrastructure.

by Reuters