P and Tokyo Electric Power Company (TEPCO) today signed a sales and purchase agreement for liquefied natural gas (LNG).

Under the agreement, TEPCO will purchase from BP up to 1.2 million tonnes of LNG per year (mtpa) for 17 years starting in 2017.

BP will supply TEPCO with LNG from its diverse portfolio of LNG sources. This is the first long-term portfolio contract for TEPCO. It is also BP’s first long-term contract with TEPCO where BP is the sole supplier.

The agreement provides for Henry Hub pricing indexation, along with the supply of LNG with low calorific content, and as such is consistent with TEPCO’s strategy to diversify both its pricing indexation and supply sources. By allowing for supply from multiple LNG sources, the agreement supports BP’s upstream developments as well as BP’s supply arrangements from sources such as the Freeport LNG project.

Paul Reed, Chief Executive of BP Integrated Supply and Trading, said: “BP greatly appreciates the opportunity to work with TEPCO in implementing this innovative agreement. Furthermore, we look forward to working closely with TEPCO on future sales opportunities, as it develops its new business model.”

About BP and LNG

BP is active in many of the major LNG producing regions as well as in the main LNG markets. It is involved in LNG projects in Australia, UAE, Indonesia, Egypt, Trinidad and Angola.
BP has a liquefaction tolling agreement for over 4.4 mtpa LNG capacity at the Freeport LNG Project in Texas, USA. The project plans to make a final investment decision later in 2014.

About Tokyo electric

Tokyo Electric Power Company is Japan’s largest electric utility, with 29 million customers and 35,000 employees. It was established in 1951.

About BP

BP is one of the world's largest oil and gas companies, serving millions of customers every day in more than 80 countries, and employing nearly 85,000 people. BP's business segments are oil and gas exploration & production, and refining & marketing. In alternative energies, BP has low- and no-carbon wind and biofuels businesses. Through these activities, BP provides fuel for transportation; energy for heat and light; services for motorists; and petrochemicals products for plastics, textiles and food packaging. It has strong positions in many of the world's hydrocarbons basins and strong market positions in key economies.