THE LONG-TERM LNG CONTRACT PRICING PROBLEM:CASE SOLVED

摘要

The LNG market is stuck for Asian buyers.While the Americas can comfortably rely on Henry Hub and Europe indexes to NBP or TTF,traditional oil-indexed pricing methods for LNG contracting in Asia are at odds with emerging trends in LNG pricing,leaving buyers and sellers separated well beyond the normal give and take in negotiating a deal.New deals continue to trickle out based on every type of indexation ranging from Brent crude to Platts’JKM price for LNG in Asia,but the type of broad-based anchor index traditionally portrayed by the JCC (Japanese Crude Cocktail) over the last few decades remains the elusive glue for tying together the fragmented world of global LNG pricing.Is oil indexation of long-term LNG contracts dead? Not just yet,nor does it have to be.For now,the lack of a long and liquid forward curve in Asian gas pricing will keep oil indexation in the discussion,as the forward curve-accurate or not in terms of outturn pricing-is still the benchmark in terms of creditworthiness and financing.While liquidity in JKM,TTF,and Henry Hub continues to improve and is now a mainstay in pricing spot cargos,the role of oil still remains an important issue,even if the competitive landscape has changed between the two fuels.Bridging this pricing gulf on long-term LNG contracts between buyers and sellers remains the single biggest obstacle to the development of new liquefaction capacity.