India, Japan to Team up to Get More Flexible LNG Deals

TIL Desk Business/New Delhi/ India will work with Japan to make long-term liquefied natural gas (LNG) import deals more affordable for its price-sensitive consumers, it said on Wednesday, as these two big importers try to secure better prices and concessions from suppliers.

The arrangement will help state-run GAIL India Ltd swap a part of its 5.8 million tonnes of LNG booked with firms from the United States with that of Japan’s contracted volumes in Asia and elsewhere, Sunjay Sudhir, joint secretary for international cooperation in India’s federal oil ministry.

The world’s biggest LNG buyers, all in Asia, are increasingly clubbing together to secure more flexible supply contracts in a move that shifts power to importers from producers in an oversupplied market.

An alliance of big buyers puts pressure on exporters such as Qatar, Australia and Malaysia. They prefer to have clients locked into fixed supply contracts that run for decades and make buyers take fixed amounts of monthly volumes irrespective of demand, with no right to re-sell surplus supplies to other end-users.