Asian LNG Buyers Seek to Lower Oil-Linked Contract Slopes: Platts

Asian LNG importers are negotiating to reduce oil-linked price lopes on long-term LNG contracts amid expectations of a gradual shift towards a buyers’ market, Platts said.

• Sellers are now competing for a shrinking share of high-value customers such as South Korea and Japan, with buyers trying to push prices to around 12% of Dated Brent or lower.
• One Middle East LNG producer has signed new contacts with European importers and a Japanese importer at a 13.2% slop to crude on a FOB basis and 14.2% slope to crude on DES basis.
• Spot LNG prices have continued to ease from their 2022 peaks, with additional supply from US and Qatar starting 2025.
• Spot JKM prices are currently around $10/MMBtu, while crude oil at $85/b with a 13.5% slop would bring a term-contract price to $11.5/MMBtu.
• This disconnect would be exacerbated if worsening geopolitical risks push up crude further.