Kyushu Electric Power has agreed to buy 12 cargoes of liquefied natural gas a year, roughly 850,000 tons, from the expansion of the LNG Canada export plant for 15 years, its first long-term supply deal sourced from Canada.

The Fukuoka-based utility signed a basic agreement on Oct. 28 with Diamond Global Energy Pte. Ltd., a subsidiary of Mitsubishi Corp., the company said in a statement. Deliveries start when the two new production trains at Kitimat, British Columbia, begin commercial operation, which the partners expect in the early 2030s.

For investors in Asian utilities and gas, the deal is an early named offtake contract from LNG Canada's second phase. It shows a Japanese power company paying for supply security with a route that runs across the Pacific instead of through the Middle East.

Kyushu Electric Takes 40% of Mitsubishi's LNG Canada Volume

The numbers line up neatly with Mitsubishi's position. According to a project summary attached to Kyushu's release, Mitsubishi's share of the expansion output is 2.1 million tons a year, and Kyushu will take 850,000 tons of it. That is about 40% of the trading house's new Canadian volume committed to a single buyer, a Capital Times calculation.

LNG Canada runs under an equity lifting structure: each owner takes its proportionate share of the gas produced and sells it on, Offshore Engineer reported when Shell announced the final investment decision on Sept. 29, a date and ownership split also reported by World Oil. Shell owns 40%, Malaysia's Petronas 25%, PetroChina and Mitsubishi 15% each, and Korea Gas Corp. 5%. Phase 2 adds two trains and lifts capacity to 28 million tons a year from 14 million. The first two trains started production in June 2025, Kyushu's summary said.

The contract is on a delivered ex-ship basis, meaning the seller handles shipping to Japan. Kyushu said the cargoes come with flexibility to change destination, which lets the utility send cargoes elsewhere when its own demand is lower. Natural Gas Intelligence described the agreement as preliminary, and the parties have not disclosed price terms.

The deal arrived days before a separate transaction at the holding level. On Nov. 2, a Blackstone-led group agreed to invest $3.1 billion for 49.9% of the Mitsubishi unit that holds the trader's LNG Canada interest, LNG Prime reported. Mitsubishi keeps control of that unit, so a signed customer for part of its new volume is useful context for both sides of that investment.

Shorter Voyages and No Chokepoints

Kyushu's stated reason is geography. In its release, the utility said the Canadian west coast is relatively close to Japan by sea and that cargoes do not need to pass through geopolitically strategic chokepoints. It said adding Canada to its supplier list would spread its sources further and help keep long-term LNG supply stable.

That argument carries weight for Japanese buyers that rely on seaborne LNG, and it comes as other Asian importers are locking in winter cargoes. A Kitimat cargo sails directly across the North Pacific.

Shell, the operator, framed Phase 2 in similar terms in September. Cederic Cremers, the company's Integrated Gas president, said the project helps supply Asian customers "at a time when diversity of energy supplies" matters more, according to Offshore Engineer. Coastal GasLink will add five compressor stations to its 670-kilometer pipeline to feed the larger plant.

What the Contract Means for Kyushu Electric's Earnings

Kyushu Electric, listed in Tokyo and Fukuoka under code 9508, is not short of gas business. It holds 40% of KEYS Bunkering West Japan, a venture with NYK Line, Itochu Enex and Saibu Gas that runs the LNG bunkering ship KEYS Azalea. That vessel made its 100th fuel delivery on Oct. 21, the partners said on Oct. 26.

The utility's results have been firm this year. For the three months to June, net sales rose 6.9% to 532.7 billion yen and net profit attributable to owners climbed 30.7% to 61.1 billion yen, according to its first-quarter filing. Its forecast for the year to March 2027 still calls for net profit of 130 billion yen, down 15.9% from the prior year, and ordinary profit of 180 billion yen.

A long-term contract signed now will not touch those numbers for years. What it does is fix a portion of Kyushu's fuel supply for 15 years from the early 2030s, from a route the utility says avoids geopolitical chokepoints.

The next step is a binding sale and purchase agreement to replace the basic agreement. Investors will also watch Kyushu's first-half results, which will show how fuel costs and its nuclear fleet are feeding into profit ahead of the winter peak.