TOKYO, April 1 Japanese trading house Sumitomo
Corp said on Monday it has agreed to take 2.3 million
tonnes per year of liquefied natural gas (LNG) from the Cove
Point project in the United States and sell the purchased fuel
to two users in Japan.
The agreement depends on the terminal getting export
approval from the U.S. government because Tokyo and Washington
don't have a free trade agreement.
Japanese Prime Minister Shinzo Abe in February lobbied U.S.
President Barack Obama for access to American shale gas, which
is cheaper than LNG sold into Asia at prices linked to oil.
Japan, the world's biggest LNG importer, has increased use of
the fuel after the Fukushima nuclear crisis in 2011 shut down
most of the nation's nuclear power plants.
Tokyo Gas Co, Japan's biggest city gas supplier,
has agreed to buy 1.4 million tonnes a year of LNG for 20 years
after the start of the project, and Kansai Electric Power Co
, the country's No.2 regional power utility, about
800,000 tonnes a year for 20 years, Sumitomo said in two
Once approved, the U.S. project aims to start LNG shipments
in the latter half of 2017, Sumitomo added.
The Cove Point project's operator, a subsidiary of Dominion
Resources, intends to convert the import terminal in
Maryland to an export plant that would ship up to 1 billion
cubic feet of U.S. natural gas a day -- about 7.7 million tonnes
of LNG a year -- to foreign markets with high