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Japan regulator ends LNG resale restrictions

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LNG Industry,

Reuters are reporting that Japan's anti-monopoly regulator ruled on 28 June that all new contracts for LNG should not contain restrictions on reselling cargoes of the fuel, adding momentum to a push to liberalise the LNG market.

The decision is likely to lead to more trading of LNG cargoes by buyers in Japan, and could see challenges to similar restrictions elsewhere in Asia.

The ruling comes as new LNG projects have boosted supply and many producers have already relented on the issue, offering contracts without resale or destination restrictions.

A spokesman for Jera said that easing or scrapping destination clauses was essential to boosting liquidity of LNG and developing a healthy LNG market in Asia.

Japan is in a strong position to renegotiate supply terms given it spent about US$30 billion to import nearly 85 million tof LNG in the year to end-March.

The move is a reprise of the upheaval in Europe in the early 2000s when the EU found certain gas market practices anti-competitive.

Japan's Fair Trade Commission late last year ordered the country's LNG buyers to provide details on contract requirements that prevent them from reselling the liquefied fuel to third parties.

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