Japan attempts to bolster LNG import flexibility

Japan’s latest efforts to make its LNG contracts more flexible could have mixed results
Futtsu power station. Japanese LNG buyers now have a stronger negotiating position to divert cargoes. (Tepco)

Japan, the world’s largest LNG importer, has stepped up efforts to boost flexibility in its LNG supply contracts. However, some tactics are likely to prove more effective than others, sources told Interfax Natural Gas Daily.

Late last month, Japan’s Fair Trade Commission (JFTC) ruled that certain destination clauses are in breach of competition law, giving buyers a stronger position to negotiate with sellers to divert and resell their LNG cargoes.  

The JFTC’s findings provide clarification on destination clauses, diversion clauses and profit-sharing mechanisms in relation to...

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