Qatar crisis to speed the rise of Asia’s spot LNG trade

By Henning Gloystein | SINGAPORE Qatar’s isolation by other Arab nations has dealt a strong hand to Japanese utilities in talks reviewing long-term gas contracts with the top LNG exporter, likely accelerating a shift to a more openly traded global market for the fuel. If Japan gets its way in the periodic contract review, the world’s biggest buyer of LNG would have to import more short-notice supplies from producers such as the United States, another step away from rigid deals that run for decades towards a more active spot market. At stake for Qatar are 7.2 million tonnes of annual liquefied natural gas (LNG) sold in contracts that expire in 2021. The $2.8 billion a year in gas mostly goes to Japan’s JERA, a joint venture between Tokyo Electric and Chubu Electric that is the world’s single biggest LNG buyer. “Since the crisis emerged, the Japanese are sure not to renew all contracts and they will push very hard to get more flexible terms,” said an advisor on LNG contracts, speaking on condition of anonymity due to the sensitivity of ongoing negotiations. Qatar and Japan as seller and buyer will each account for nearly a third of 300 million tonnes

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Source: CTRM Center

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