Japanese LNG import prices - are alternatives to JCC evolving?

摘要

Given the dominance of existing contracts, it is highly likely that JCC pricing will remain the principal mechanism in Japan and Asia up to at least the early 2020s. Even in the longer run, JCC can remain an important part of Asian LNG pricing, depending on future negotiations between buyers and sellers. But the market environment is changing rapidly. The prevailing over-supplied market, expected growth in LNG supply flexibility, and buyers' pursuit of competitive LNG, all point to a gradual shift towards a pricing regime which better reflects market fundamentals. The answer to the question posed in this article is, therefore, that alternatives to JCC are indeed evolving in the Japanese LNG market; buyers are searching for alternatives and the share of JCC-based LNG is likely to decline. Currently, there is no clear answer as to what will be the single most promising alternative to JCC, but options that will better reflect market conditions are being introduced and will be tested.