US LNG set to change price framework

Asian liquefied natural gas buyers expect oil-link transition

Asian liquefied natural gas (LNG) buyers expect US exports to spur the change from traditional oil-index priced contracts to include a larger gas hub element, according to the Japan Oil, Gas, and Metals National Corporation (Jogmec).The traditional Asian buyers – comprising Japan, South Korea, and Taiwan – have bought long-term LNG on prices linked with oil for over 40 years. But with the US planning to build a number of LNG export facilities, Asian importers have rushed to sign contracts because they are either linked to US Henry Hub gas prices or are tolling agreements where the shipper buys the gas at market prices themselves and pay a liquefaction fee.“Since US projects are based on the