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(Changes dateine, adds graphic, Japan's latest LNG imports)
By Aaron Sheldrick and Marwa Rashad
TOKYO, Oct 20 (Reuters) - Japan's Tohoku Electric Power
has signed a contract with BP for six cargoes of
liquefied natural gas (LNG), two trading sources told Reuters,
avoiding paying record high prices on the spot market for
short-term supplies.
The cargoes will be delivered in the first half of next year
and are priced at 20% of Brent crude, the sources said,
translating to about $17 per million British thermal units
(mmBtu) at current prices.
That is less than half the prevailing spot price in Asia of
$38.50/mmBtu <LNG-AS>, a record high as an energy crisis engulfs
much of the Northern Hemisphere, driving a rally in oil and
pushing coal prices to historic highs.
"They should be happy with that price," said one of the
trading sources, who spoke on condition of anonymity.
A Tohoku Electric spokesperson said the utility would not
discuss its fuel procurement strategy. BP did not immediately
respond to a request for comment.
Japanese LNG buyers have said they would target short-term
supply agreements when they need to top up long-term contractual
cargoes of the superchilled fuel.
Last winter they frantically competed with Chinese and South
Korean buyers for cargoes in a tight spot market as freezing
conditions hit the region for weeks on end, sending Japanese
electricity prices to global records.
This winter, the regional crunch looks set to be played out
on a global scale as Europe struggles for gas supplies,
benchmark prices in the United States are around seven-year
highs and economic growth in China is squeezed by power
shortages.
Tohoku's deal also underlines the absence of Japanese buyers
in the spot market as they rely on long-term contract supplies
of LNG, where the average price was just over $10 mmBtu in
August, according to official trade figures.
Japan imported 5.41 million tonnes of LNG in September,
figures from the government showed on Wednesday, down 17% from a
year earlier, another sign Japanese buyers have avoided the spot
market, traders said.
LNG inventories in Japan are also seasonally above average,
but with electricity prices rising in recent weeks, Tokyo-based
executives and traders say they are concerned about another
winter of high prices and the threat of blackouts.
(Reporting by Aaron Sheldrick, Marwa Rashad, Jessica Jaganathan
and Yuka Obayashi Editing by Steve Orlofsky and Mark Potter)
