Japan’s Kyushu Electric Power is considering acquiring a 10% stake in the Lake Charles liquefied natural gas (LNG) project in Louisiana, US, reported Nikkei Asia.

The company is also negotiating a 20-year contract to purchase 1.6 million tonnes of LNG annually, alongside other Japanese utilities.

This move is part of Japan’s strategy to diversify its energy sources and reduce dependency on Russian imports.

Kyushu Electric is also exploring the possibility of acquiring a stake in the Lake Charles project through a broader Japanese consortium.

A Kyushu Electric spokesperson was quoted by Reuters as saying: “It is true that we are considering the possibility of taking on LNG from new U.S. LNG projects, including the Lake Charles, as a potential source of future LNG procurement, as well as making an equity participation.”

The discussions also come amid Japan’s efforts to find replacements for LNG supplies from Russia’s Sakhalin-2 project, from which Japanese utilities currently import around six million tonnes each year.

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Contracts with the Sakhalin-2 project are expected to expire around 2030.

Kyushu Electric executive officer Takashi Mitsuyoshi was quoted by Nikkei Asia as saying: “There are only a handful of LNG projects [that seem economically feasible and] can sell a large amount over a long period. It will be a challenge for Japan unless it secures long-term contracts in the next two to three years.”

Being developed by Energy Transfer, the Lake Charles LNG project will have an annual production capacity of 16.5 million tonnes.

The US midstream company is looking to divest stakes to potential partners to facilitate the realisation of the project, which is estimated to cost more than $10bn.

The project is due to be commissioned in 2028.

The Japanese Government is contemplating support for the project through financing from the Japan Bank for International Cooperation and the Japan Organization for Metals and Energy Security.

In August 2023, Reuters reported that Energy Transfer was seeking a new and expedited export licence for its Lake Charles LNG plant.