LNG contracting shifts toward shorter tenors
Buyers are trading price certainty for flexibility as new liquefaction capacity approaches.
Long-term LNG offtake agreements are getting shorter. Buyers facing an incoming wave of liquefaction capacity are reluctant to lock in two-decade tenors at current slopes.
Sellers, for their part, still need bankable volume commitments to reach final investment decisions, creating a negotiating gap that intermediaries are being asked to bridge.
The compromise emerging in several recent deals is a shorter firm period with structured extension options, a format that shares volume risk more evenly.
Sofia Lindqvist — Commodities Analyst. Sofia writes data-led analysis on commodity flows, brokerage structures and counterparty risk.
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