Astomos Energy, Japan's top LPG supplier, said Wednesday it has concluded additional contracts with US' Enterprise Product Partners, including a deal to buy 500,000 mt/year of US LPG over 2019-21.
Astomos will also increase its US LPG procurement volumes by around 400,000 mt over 2014-16 via existing contracts with Enterprise, taking its total term US LPG purchases to 5 million mt over 2014-21, the company said.
All of Astomos' US LPG term deals are with Enterprise and are linked to Mont Belvieu LPG prices. But Astomos declined to elaborate on terms of the deals, including price and shipping arrangements.
Under the latest deals, Astomos increased its annual US LPG term purchase volume by 100,000 mt to 500,000 mt in 2014 and by 200,000 mt to 600,000 mt in 2015, a company official said.
Over 2016-18, Astomos also hiked its annual term purchase volume by 100,000 mt/year to 800,000 mt/year, the official said.
The Astomos official attributed the 2014-15 increases to Enterprise's rising near-term shipment capacity.
The new deals are part of Astomos' ongoing efforts to diversify its supply sources, a process that starting with Enterprise in 2008 and with procuring LPG from non-Middle Eastern countries such as East Timor and Australia, the company said.
As a result, Middle Eastern supply on a FOB basis makes up about 50% of Astomos' contractual LPG supply, compared with Japan's national average of around 80%, the company said.
Currently, Astomos buys and supplies a total of around 10 million mt/year of LPG, accounting for roughly 15% of the global LPG trade, the company said. It plans to expand that to around 12 million mt/year by 2015 by developing demand from major end-users.
Japan's Idemitsu Kosan holds a 51% stake in Astomos Energy, with Mitsubishi holding the rest.
Astomos' latest deals have emerged as several Japanese companies are signing their first US LPG term contracts as part of their own efforts to diversify their predominant Saudi Arabian CP-based imports from the Middle East.
Japan's imports of US LPG are expected to rise further to around 3 million mt/year, including spot purchases, by 2017 and will account for an estimated 25% of the country's total imports, Japan LP Gas Association Chairman Tatsuhiko Yamasaki said March 5.
In 2013, Japan imported 952,000 mt of US LPG, amounting to 8% of its total imports of 11.574 million mt, according to the Japan LP Gas Association.
