The end of producer power

The wave of LNG supply hitting the market is putting buyers in control

Sustained low prices in Asia-Pacific's oil-indexed liquefied natural gas market are shaking up supply-demand relationships as buyers look to take advantage of an excess of gas to rejig sourcing arrangements. But are long-term contracts on their way out, or is this just a blip? While most contract information remains confidential, snippets of information are emerging-and they show buyers flexing their new muscle as a wave of new LNG supply erodes the power producers have held for so long. The historical take-or-pay long-term contract is being "tested", says Arthur Dixon, an LNG market specialist. For most of their existence, Asian LNG contracts have been restrictive: characterised by fixed te