Financial Times: Japan’s LNG in crucial pricing shift

Japan’s liquefied natural gas industry, the world’s largest, is starting to move away from using crude oil-linked contracts and is instead partially pricing agreements to US gas quotes – a critical step towards the creation of a truly global natural gas market.

Until now, the global natural gas market has been largely split into isolated regional hubs, with prices at different levels and little trade in between.

The shift in Japan comes as many of the country’s existing LNG contracts, which date from the 1970s and 1980s, are set to expire over the next decade, providing importers with a rare opportunity to renegotiate the terms of the supply agreements.  MORE