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LNG sellers lay out new strategies for wooing buyers in crowded market

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According to Reuters, LNG producers are drawing customers with shorter term contracts, by removing restrictions that limit where cargoes can be re-sold and by providing equity in terminals.

“It’s time for us to see more collaboration between buyers and sellers so they are not fighting with each other but can be friends,” Masakazu Toyoda, chairman and chief executive of the government-associated Institute of Energy Economics, Japan (IEEJ).

One example of the so called ‘wooing of buyers’ includes the US LNG project developer Tellurian Inc. saying that it is offering billions of dollars in equity in its Driftwood project in Louisiana, which will in turn lower the delivered cost of the fuel to buyers in Japan.

Similarly, Texas LNG, is offering a flexible tolling fee at its facility in Brownsville, in southern Texas, which could fluctuate according to market conditions and oil prices.

Tolling agreements are a way to finance liquefaction plants or regasification terminals to convert natural gas into LNG for transport or storage.

Others are negotiating for contracts to be done over a shorter period.

For example, Malaysian state energy company Petronas recently signed a three-year LNG supply agreement with JERA Co., the fuel purchasing joint venture between Tokyo Electric Power and Chubu Electric Power, which is shorter than the 15-year deal that expires in March 2018.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/26102017/lng-sellers-lay-out-new-strategies-for-wooing-buyers-in-crowded-market/

 

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