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Tokyo Gas forecasts that destination-flexible LNG contracts will become a global phenomenon

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LNG Industry,

Reuters is reporting that Japan’s biggest city gas seller, Tokyo Gas Co., expects that contracts for destination-flexible LNG shipments will no longer be unique to the West and Japan, but will spread to become commonplace worldwide.

Japan’s Fair Trade Commission ruled last June that destination restrictions preventing the re-sale of contracted LNG cargoes breached competition rules. The decision is set to transform the Asian LNG market in the same way as the European market has been. US LNG exports are also free from restrictive destination clauses.

“Europe has been free from destination clauses basically, while Japan also issued such a recommendation, and Asia is set to follow up,” Tokyo Gas President Takashi Uchida, said. “The global trend is clearly toward lifting destination clauses. It is a buyer’s market now, so we can get good conditions, and we would continue to consider taking a long-term deal if conditions were good.”

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