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JFTC launch investigation into LNG supply contracts

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LNG Industry,


The Japan Fair Trade Commission (JFTC) has recently launched an investigation into whether destination clauses in long-term LNG supply contracts with Japanese buyers violate Japanese competition law. 

If the JFTC formally objects to these arrangements, then this may result in the forced renegotiation of LNG SPAs, a complicated renewals process and/or trigger price review procedures. Furthermore, it cannot be excluded that other antitrust enforcement agencies in the Asia region will follow suit and subject LNG supply agreements involving buyers in their jurisdiction to the same level of antitrust scrutiny as well. 

The JFTC’s investigation presents a myriad of potential implications for LNG sellers against the backdrop of a global glut and a current energy over-supply of the Japanese market; analysts estimate that Japanese buyers will face a surplus of 12.2 billion m3 of LNG in 2017 and 8.6 billion m3 in 2019. 

Read the article online at: https://www.lngindustry.com/liquefaction/07032017/jftc-launch-investigation-into-lng-supply-contracts/

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