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Japanese regulator commences investigation into LNG resale restrictions

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LNG Industry,

According to Reuters, Japan’s Fair Trade Commission (JFTC) has ordered the nation’s LNG buyers to provide details on contract terms that forbid them from reselling cargoes to third parties. Companies contacted have until the end of November 2016 to respond.

Reuters claims that Asian buyers have long complained that such clauses restrict trading LNG, even when it would make economic sense to sell it other markets.

Reuters claims that this move suggests that the regulator has commenced an investigation into whether these ‘destination clauses’ are preventing competition. As a result, a number of LNG contracts could be renegotiated.

Reuters also claims that the inquiries by JFTC were made under Japan’s anti-monopoly law, adding that any company that fails to provide details on the contracts could face penalties.

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