Key LNG buyers seeking shorter-term contracts: report

Multinational

SINGAPORE, October 22, 2024 – Buyers in top global LNG import destinations are seeking shorter-term contracts and greater flexibility, Reuters reported on Tuesday.

The report said the needs of buyers such as Japan’s JERA and China’s PetroChina were at odds with the preferences of suppliers, such as Qatar, who prefer long-term fixed contracts.

Facing variable demand in their markets, buyers are seeking shorter terms and the flexibility of being able to resell cargoes in periods of low demand.

The agency quoted an LNG executive at Japan’s JERA Global Markets, which deals in 40 million tonnes per year, as saying the company’s customer load was increasingly unpredictable.

The head of LNG at PetroChina International was also cited as saying the company faces major imbalances in supply and demand.

An executive at supplier Mexico Pacific said the company is open to more flexible contracts but new projects would still need the standard 15- or 20-year offtake commitments in order to secure financing.

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