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LNG: Asian LNG Buyers Seek Flexible Contracts for Supply Security: Platts

LNG
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Asian LNG importers are increasingly using flexible LNG contracts to manage supply security, executives said at APPEC, cited by Platts.

  • An example of such flexibility is as adjustment of offtake volumes during weak demand or due to uncertainty around alternative fuels and energy transition.
  • Flexibility on a range of T&Cs were initially built into LNG supply contracts to manage seasonal fluctuations. Over time it provided traders with optionality to move LNG cargoes around to profit on various types of arbitrage.
  • US contracts have emerged as the main source of flexible LNG due to the lack of destination restrictions, but buyers said there could be other trade-offs when opting for more flexibility apart from prices.
  • Meanwhile, buyers are also navigating sanctions on Russian LNG. APPEC attendees aid that an LNG shadow fleet akin to that in oil is already emerging, although is not as prominent yet.
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Asian LNG importers are increasingly using flexible LNG contracts to manage supply security, executives said at APPEC, cited by Platts.

  • An example of such flexibility is as adjustment of offtake volumes during weak demand or due to uncertainty around alternative fuels and energy transition.
  • Flexibility on a range of T&Cs were initially built into LNG supply contracts to manage seasonal fluctuations. Over time it provided traders with optionality to move LNG cargoes around to profit on various types of arbitrage.
  • US contracts have emerged as the main source of flexible LNG due to the lack of destination restrictions, but buyers said there could be other trade-offs when opting for more flexibility apart from prices.
  • Meanwhile, buyers are also navigating sanctions on Russian LNG. APPEC attendees aid that an LNG shadow fleet akin to that in oil is already emerging, although is not as prominent yet.