LNG in World Markets: Special Contracts Issue

Collapse in LNG contract lengths and volumes raises future supply concerns

A dramatic acceleration of a trend toward smaller volumes and shorter tenures for LNG contracts in 2017 highlights the growing commoditization of the global LNG market even as it raises troubling questions about future supply. Average contract lengths for deals signed in 2017 fell to 6.7 years – the lowest ever recorded – compared with 11.5 years in 2016. With many options for supply and uncertainty over future prices, last year buyers signed dozens of short- and medium-term contracts rather than commit to long-term deals that could help support the construction of new capacity that is expected to be needed by the mid-2020s. More information about the findings mentioned above are available in a White Paper released by Poten & Partners. To download a copy of the White Paper, please fill out the following form.