GLNG: Japan signs deal with Italy’s Eni for LNG supply during emergencies

Japan and Italian energy major Eni have agreed in principle to sign a memorandum of understanding (MoU) to allow Tokyo to purchase LNG from the company during emergencies, the Japanese government revealed on October 6.

Under the agreement, Japan will have the ability to buy the super-chilled fuel from Eni via the state-run Japan Organisation for Metals and Energy Security (JOGMEC), which will officially sign the deal with the Rome-headquartered company. The two partners have a history of collaboration, with JOGMEC being a stakeholder of Eni.

For Japan, the deal allows Tokyo to hedge against rising fears of energy insecurity amid the ongoing conflict between Russia and Ukraine and the worsening situation in the Middle East as tensions erupt between Israel and Iran.

In particular, concerns are emerging that Iran, through its proxies, the Yemen-based Houthis, could block the passage of LNG tankers through the Strait of Hormuz, a crucial artery for LNG being shipped from gas powerhouses Qatar and Saudi Arabia.  

Meanwhile for Eni, the agreement offers an opportunity to further strengthen ties with Japanese firms as it courts partnerships and financial backing from the East Asian country for its second floating LNG (FLNG) project offshore Mozambique called Coral Norte FLNG.

Coral Norte FLNG will be a replica of Eni’s 3.4mn tonne per year (tpy) Coral Sul FLNG project situated in the deep waters of the Rovuma Basin. The facility came online in October 2022 and has already shipped more than 70 cargoes of the super-cooled gas as well as at least 10 cargoes of condensate.

Eni has set a target to expand its LNG portfolio to 18mn tpy by 2027 and views Japan as a potential key market. Currently, Japan procures the majority of its LNG from Australia and Malaysia.

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