Japan’s Sumitomo and Freeport LNG have signed a heads of agreement (HoA) for liquefaction tolling services for 2.2 million tons per annum (Mtpa) of LNG.


Image: Sumitomo, Freeport LNG sign HoA. Photo: Photo by rawpixel on Unsplash.

Under the HOA, SCOA, a subsidiary of Sumitomo Corporation, has agreed to negotiate for a 20-year liquefaction tolling agreement (LTA). The LTA is expected to start in 2023 upon the commencement of commercial operations of the fourth train (Train 4) of Freeport LNG’s natural gas liquefaction and export facility located on Quintana Island near Freeport, Texas.

The 2.2 mtpa of capacity to be contracted under the LTA will enable SCOA to significantly expand its U.S. natural gas-related business across the value chain, from upstream development to LNG export.

“We are pleased to announce the start of a long-term relationship with Sumitomo as our first Train 4 foundation customer,” said Michael Smith, Chairman and CEO of Freeport LNG. “Sumitomo’s significant U.S. gas trading and LNG operations makes it an especially great addition to our outstanding group of existing customers. Sumitomo’s 2.2 mtpa of capacity under this HOA is a major step toward Freeport LNG contracting the approximately 3.5 mtpa needed for financing and commencing construction of Train 4.”

“This valuable partnership with Freeport LNG is an excellent step for SCOA as we continue to expand our business within this sector,” said Shingo Ueno, President and CEO of Sumitomo Corporation of Americas. “We believe our ability to learn and grow through this long-term project will allow us to provide real value to the energy industry globally, connecting the growing natural gas supply in the U.S. and the increasing appetite for LNG worldwide.”

Source: Company Press Release