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Markets & Forecasts

Some Asian buyers cautious on shift to LNG spot contracts

Oil-indexed long-term contracts remain preferable to spot deals for some buyers as they seek to safeguard security of supply Oil-indexed long-term contracts remain preferable to spot deals for some buyers as they seek to safeguard security of supply.
By Colin Shek 14 November 2019 Asia Pacific / LNG 0 34790
The Golden Pass LNG project in the United States. (Golden Pass)

The prevailing view for some time now among global LNG players has been that procurement strategies are shifting towards shorter contracts with smaller volumes and increasingly flexible terms. But some longstanding Asian buyers continue to prefer tried-and-tested contracting standards as they need to prioritise supply security above all else.

In the past three years, a market evolution has taken place that has restructured how LNG is transacted. Growing confidence in an expanding spot market, combined with demand uncertainties, has encouraged buyers to seek liquidity, transparency and...