JERA and EDFT to form an LNG optimisation and trading JV

July 3, 2018

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JERA and EDF Trading announced the signing of binding agreements to form an LNG optimisation and trading joint venture where JERA’s and EDFT’s LNG optimisation and trading activities will be merged into JERA Trading (JERAT).

This joint venture follows the successful completion of the acquisition of EDFT’s coal business by JERAT on 4th April 2017.

JERA holds 66.67% of the equity in JERAT through its wholly-owned subsidiary JERA Trading. EDFT holds 33.33% of the shares in JERAT and is a wholly-owned subsidiary of EDF.

With demand for LNG in Japan becoming increasingly variable and difficult to predict and the ramp up in US LNG liquefaction, Europe has become a key balancing market for excess global LNG. As a result, JERA and EDFT believe that there is significant room for optimising LNG on a global basis, establishing a more liquid market, and, over time, developing a clear pricing signal for LNG in Asia.

The companies will combine their LNG optimisation and trading activities into JERAT which will become the exclusive LNG optimiser for JERA and EDF, managing their collective short and medium term LNG optimisation activity. LNG remains a strategically important fuel for JERA and EDF and this agreement will bring more flexibility and scale to both partners without affecting JERA’s and EDF’s long term procurement activities.

As part of this transaction, EDF Trading North America, will be responsible for supplying electricity and natural gas to meet JERA’s capacity requirements at the Freeport liquefaction terminal. EDFT in Europe will become the exclusive market interface for JERAT with respect to the European natural gas markets.

Recognising the expansion of JERAT’s business globally, JERA and EDFT agreed to change the name of JERA Trading to “JERA Global Markets”.

This transaction is subject to customary regulatory approvals and is expected to be completed by early 2019. 

Edited from JERA press release.