Era of flexibility

Buyers are taking control of an oversupplied market and they want shorter contracts and freedom to sell what they don't use

East Asia's liquefied natural gas market is undergoing an inexorable shift as buyers push for more equitable contract terms and an impending supply surplus boosts trading and liquidity. Japan, South Korea, China and Taiwan between them account for 60% of all global LNG imports, so the consequences will be felt across the world's projects and operators. "The industry is moving in the direction of a more flexible and transparent market," says Hiroshi Hashimoto, senior analyst of the gas group at the Institute of Energy Economics, Japan. In August, South Korea joined Japan in probing contractual constraints for reselling LNG cargoes under destination clauses in Free on Board (FOB) contracts. Ch