Japan's LNG sector gets a boost

By BizClik Admin

In what has become a highly regimented market in Japan, flexibility has now been embedded, with The Japan Fair Trade Commission stating that all contracts for LNG should lift the ban on the resale of liquified natural gas (LNG).

The decision will enable the movement of LNG outside of Japan in areas such as Australia and the UAE, opening the door for change within other cities within Asia.

Handing increased authority to buyers will allow the renegotiation of existing contracts and supply terms, as well as support the investment in overseas projects, something itself which is increasing in the market as a whole.

"By removing the destination clauses, the idea is to increase liquidity in the market which is going to be a key step towards market liberalisation and development of a pricing hub," commented Neil Beveridge, oil and gas analyst at AB Bernstein in Hong Kong.

Kelly Anne Shanks, Head of Asian LNG Research at consultancy Wood Mackenzie has said, "Certainly this ruling means the balance of power in the LNG market has moved from seller very strongly to the buyer."

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