The Japanese fuel purchasing company JERA and the trading arm of the French energy group EDF (EDF Trading, EDFT) have agreed to set up an LNG optimisation and trading joint venture (JV), which will enable both company to optimise and merge their respective trading activities into JERA Trading (JERAT). JERA will hold a 66.67% equity in JERAT - to be later renamed JERA Global Markets - through its wholly-owned affiliate JERA Trading International, while EDFT will own the remaining 33.33% shares. EDFT and JERA will have joint responsibility and joint control of the new businesses. This transaction is subject to customary regulatory approvals and is expected to be completed by early 2019.
JERA is the largest LNG importer in the world, with around 35 Mt/year of LNG intake, while EDF currently trades 3 to 5 Mt/year of LNG. The deal will allow JERA to have access to 15 European LNG terminals and to six European gas hubs in the United Kingdom, France, the Netherlands, Belgium and Spain. JERA would have more flexibility to adjust to volatile Japanese LNG demand in the mid- to long-term, amid the uncertainties over the restart of nuclear plants in the country.
Established in 2015, JERA is a fuel purchasing equal joint venture of two major Japanese power companies, TEPCO and Chubu Electric. In April 2017, JERA acquired a 66.67% stake in EDF Trading's coal and freight business, which handles around 100 Mt/year of coal.