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Demand for term LNG contracts firms amid supply security concerns
LNG term contract volumes have leapt this year, as energy security becomes paramount worldwide, with markets — most notably among them China — snapping up deals to head off potential shortages, industry sources and analysts have told S&P Global Commodity Insights.
While long-term deals have become increasingly appealing to buyers, short and medium-term arrangements have remained important, due to the flexibility they provide, industry observers said.
The LNG supply response takes a minimum of around four years to come through and 2022-27 represents a period of “reshuffle”, according to Michael Stoppard, global gas strategy lead and special adviser with S&P Global Commodity Insights.
Most of the recent term deals have been for volumes from either projects yet to reach final investment decision, or from part of capacity expansions at existing developments.
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