The Japanese natural gas distribution company Toho Gas Co. Ltd. signed a nonbinding agreement to purchase LNG from the recently sanctioned LNG Canada export project through a Mitsubishi Corp. subsidiary.

Under the heads of agreement, Toho looks to buy about 300,000 tons of LNG per year from Mitsubishi's Diamond Gas International Pte. Ltd. for 15 years, starting in 2024. With the agreement, Toho Gas aims to further diversify its supply sources, types of contracts and price index, according to an Oct. 10 news release. Toho Gas currently sources gas from Indonesia, Australia, Malaysia, Qatar and Russia, and is planning to purchase LNG from the U.S. in 2019.

Mitsubishi is a joint venture participant in the Royal Dutch Shell PLC-led LNG Canada. Under the joint venture deal, the participants will provide natural gas supply and individually offtake and market their share of LNG. The C$40 billion project would initially have two liquefaction trains capable of producing 14 million tonnes per annum of LNG, with an export capacity of over 2 Bcf/d in its first phase.