LNG market shifts to shorter-term deals

Structure continues to shift as both buyers and sellers embrace shorter and more flexible supply contracts

The length of LNG supply contracts signed in 2020 averaged around 11 years, “a far cry from the 15–25-year contracts which were more common to the industry in its infancy”, says Emma Richards, senior oil and gas analyst at consultancy Fitch Solutions. Rystad Energy vice-president Xi Nan also sees a clear trend for shorter LNG supply contracts, and says that “long term” is now considered to be 5-10 years when previously it would have meant 20 years or more. 11yrs – Average duration of supply contracts signed in 2020 Suppliers formerly pushed for fixed, long-term SPAs because they were essential for securing sufficient project finance for liquefaction developments. However, the environ