JERAGM procures 4.1 mil mt spot LNG Apr-Jan, up from 3 mil mt in FY 2020-21: CEO

JERA Global Markets, the trading arm of Japan's largest power generation company JERA, has procured 4.1 million mt of spot LNG for the parent in the first 10 months of the fiscal year 2021-22 (April-March), up from around 3 million mt in FY 2020-21, JERAGM CEO Kazunori Kasai said Feb. 4.

JERAGM's FY 2021-22 spot LNG procurement volumes so far increased from the annual procurement volume in the previous fiscal year because of "larger consumption than planned earlier," Kasai told an online press briefing, adding that its purchase volume could increase further by the end of March.

Based in Singapore, JERAGM handles trading and optimization of its parent JERA's handling volumes of 35 million mt/year of LNG and 20 million mt/year of coal, with its fleet of 12 controlled tankers.

It primarily supplies LNG to JERA but also supplies LNG to other regional end-users, traders in addition to European gas markets with its access to the Dunkerque LNG import terminal in France.

During the 10 months period, JERAGM delivered a total of more than 200 cargoes, including its spot procurement of over 63 ships for JERA.

As part of JERA's measure to ensure its supply this winter following a lesson of tightened power supply and demand balance last winter, Kasai revealed that the JERA group has introduced a new scheme to secure a certain number of LNG cargoes with "cancel options" using its supplies from North America.

Under the scheme, JERAGM had transacted deals with JERA for three LNG cargoes originated from North America scheduled to arrive Dec. 16, Jan. 6 and Feb. 2 to Japan via the Suez Canal with the cancel options, Kasai said.

The ex-ship deals, which were linked to the Platts JKM plus Dunkerque terminal use fee, allowed JERA to cancel the cargoes if needed in 25 days, or 15 days prior to arrivals to Japan and divert the cargoes to the Dunkerque import terminal, Kasai said.

"We first made plans to bring JERAGM's cargoes from North America to Japan with shipping arrangements," Kasai said. "JERA, however, might not need these cargoes depending on the supply and demand situation, and [the deals allow] to divert the cargoes to Europe, where we have an terminal access."

"This allows us to procure cargoes in advance and sell them when the cargoes were not needed," said Kasai, adding that it is part of the JERA group's measures to ensure stable supply even with a certain additional costs.

For the current winter, JERA said Nov. 24 it had procured 2 million mt of spot LNG as additional winter supply for November 2021 to March 2022.

"We have additionally procured all of the 2 million mt basically via JERA Global Markets," Takashi Noguchi, executive officer and head of the JERA optimization department's strategy group, told an online press briefing Nov. 24.

JERA intends to make additional LNG procurements "appropriately", should there are changes in its supply-demand outlook beyond January, Noguchi said, adding that all its additional procurements were spot cargoes, including from North America.