Japanese groups sign US gas import deals Japan's two largest trading companies by market capitalisation have signed agreements to import liquefied natural gas from a US supplier, in the first such deals between the two nations. The announcements, a day after the US energy regulator granted final approval to the first LNG export project in more than 40 years, are an indication of how urgently Japan is seeking alternative sources of energy after the Fukushima crisis caused all but one of the nation's 54 nuclear reactors to be shut down. In the fiscal year ending in March, Japan's power utilities burned 53m tonnes of LNG, up 27 per cent from the year before, according to data this week from the Federation of Electric Power Companies. Under the agreements, Mitsubishi Corp and Mitsui & Co will each take 4m tonnes a year of LNG from a new export facility to be built at a site in Louisiana owned by Cameron LNG, a subsidiary of Sempra Energy of San Diego. The Japanese partners will help to fund the initial design, permitting and engineering expenses, along with an undisclosed share of the estimated $6bn total cost of development. While Japan's trading companies have been sourcing LNG from Alaska since the late 1960s, they have done so as agents for customers at home and elsewhere, subject to fixed pricing formulas linked to Japan's average imported oil price. With Sempra, however, the duo will negotiate 20-year supply agreements in which they can - in theory - push for more flexible terms, say people familiar with the situation. That may mean paying prices closer to the daily settlements at Henry Hub, a Louisiana pipeline nexus. The current supply glut from US shale-gas formations has caused the benchmark Henry Hub price to sink to $1.88 per million British thermal units - one-ninth the average rate Japan paid for its US LNG in February. The Louisiana facility could begin exporting gas in late 2016, pending regulatory approvals, Sempra said. Mitsubishi and Mitsui are the biggest of Japan's trading companies, with an estimated Y694bn ($8.6bn) of combined net income from their energy and minerals divisions in the year to March. Securing cheaper supplies of LNG is an urgent priority for Japan, say analysts, as the nation prepares for a future less reliant on nuclear power. Before the Fukushima accident last March, nuclear generation accounted for about 30 per cent of total electricity supply. "At the moment, Japan has no leverage whatsoever [in LNG]," said Sabine Schels, head of fundamental commodities research at Bank of America Merrill Lynch in London. We're seeing them very strongly in the market. They are taking any cargoes they can get, at whatever price they can get it.