Tokyo Electric Power : Conclusion of Heads of Agreement on LNG Purchase from the Prelude LNG Project in Australia

Tokyo Electric Power Company, Inc. (hereinafter "TEPCO") today signed a Heads of Agreement (hereinafter "HOA") with INPEX CORPORATION (hereinafter "INPEX"), the seller, for the purchase of LNG (liquefied natural gas) from the Prelude LNG Project in Australia. In accordance with this agreement, TEPCO will be purchasing an annual amount of approximately 560,000 tons of LNG from INPEX starting from 2017, for a period of about 8 years. TEPCO will continue to negotiate with INPEX with regard to the finalization and execution of the LNG Sales and Purchase Agreement.  

The Prelude LNG Project is a project that plans to produce approximately 3,600,000 tons per year of LNG, using natural gas produced from Prelude Gas Field and Concerto Gas Field, located off the coast of Western Australia, which is to be processed, liquefied, and shipped offshore utilizing FLNG* (Floating LNG) technology.

By purchasing LNG from this project using FLNG, a new technology, we expect to procure LNG more stably and economically in the future, in addition to diversifying our resources of LNG. 

We will continue our efforts towards the stable and economical procurement of fuels to fulfill our responsibility as a utility that ensures a stable and proper power supply.

* FLNG (Floating LNG): A new gas development technology whereby natural gas from an offshore gas field is processed, liquefied and stored on a large hull equipped with an LNG plant, and directly loaded onto an LNG vessel. One of the advantages of FLNG over conventional onshore LNG plants is that it does not require pipelines to be connected from offshore gas fields to onshore LNG plants.

1. Contract Parties 
    Seller: INPEX CORPORATION
    Buyer: Tokyo Electric Power Company, Inc.
2. Contract Period      Approx. 8 years from 2017 (planned)     
3. Contract Amount      Approx. 560,000 tons (for plateau years)  
4. Delivery Terms       Delivered Ex-Ship (DES)