Japan’s JERA creates LNG trading arm

Japan’s largest power producer JERA has established JERA Global Energy Solutions (GES), which will manage the company’s LNG, upstream, lower-carbon fuels and shipping portfolio. The company made the announcement of the vertically integrated LNG firm on July 1.

JERA GES will allow for an integrated strategy, increased portfolio management capabilities, and a sharper focus on market development for the Japanese giant. The LNG trading arm will be headquartered in Singapore, while integrated operations will be based in Japan and located in countries where it has investments.

The new trading arm will also work together with JERA Global Markets (JERAGM), which will continue to provide trading and optimization capabilities that support portfolio flexibility and responsiveness to market shocks.

“By bringing greater focus, accountability and specialization to our long-term LNG and lower-carbon fuels portfolio, JERA is better positioned to respond to changing market conditions while continuing to support stable energy supply,” Yukio Kani, JERA’s Global CEO and Chair, said in a statement.

“Together, JERA GES and JERAGM bring distinct and highly complementary capabilities to JERA, combining long-term portfolio management with world-class trading and optimization to create a stronger, more integrated LNG platform. I look forward to seeing both organizations continue to deliver long-term value for JERA,” Kani added.

JERA GES will gradually take over JERA’s long-term LNG activities under its transfer schedule.

As Japan’s largest power producer, JERA produces one-third of the country’s electricity and is one of the biggest LNG purchasers in the world.

JERA has been active in procuring more LNG supply. In mid-June the company inked a long-term supply agreement with Malaysia’s state-run Petronas to buy 2 mn tonnes per year (tpy) of the super-chilled fuel for 20 years beginning in 2028.

Also in June, JERA received its first LNG cargo from Australia’s Barossa gas project, adding a new source of supply to its portfolio.