Buyers’ Market Makes Variety of Pricing Benchmarks Possible

30 April 2019

Buyers are asking for a variety of pricing benchmarks and flexibility options in a market where new supply is
outpacing demand growth. For example, in April, Tokyo Gas and Shell announced a 10-year binding heads
of agreement (HOA) with a coal benchmark in its pricing formula.

A coal benchmark allows LNG to compete as a fuel for power generation. Tokyo Gas has a target of 2.2
million power customers and 31 billion kWh of electricity sales in 2020.

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