Natural Gas World: LNG PROJECTS NEED PLAN B

25 April 2018: “The move to shorter contracts has been gaining strength over the last four years, according to Jason Feer, head of business intelligence at ship and energy brokerage Poten & Partners.”

“In 2014, two-thirds – 20 out of 30 – new supply and purchase agreements (SPAs) were for 10 or more years; by 2017, the trend had reversed, with 20 of 30 SPAs for five years or less.”

“And the number of deals for 20 or more years has plummeted – 10- or 15- year SPAs are now considered to be long-term,” Feer said. “

“This represents a fundamental restructuring of the global LNG market,” Feer said, noting that as contract terms shorten, average volumes per deal are falling, to less than 0.70mn mt/yr last year from 0.90mn mt/yr the year before.”

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