Asian Buyers Flock to Long-Term US LNG Deals Amid Hormuz Uncertainty
Asia is seeing an influx of long-term US liquefied natural gas (LNG) deals due to supply chain issues and high prices. Energy firms from Thailand, Pakistan, and Bangladesh are actively negotiating contracts with US exporters, while China Gas Holdings Ltd. has signed a deal with Venture Global Inc. that will begin in 2030.
The current market dynamics are driving the rush to secure US LNG. Prices for long-term agreements are around $8 per million British thermal units (Btu), compared to Asian spot prices of about $30 per Btu, as Europe and Asia compete for limited supply.
According to Jera Co.'s chairman, Yukio Kani, buyers worldwide are focusing on diversifying their LNG procurement due to issues in the Middle East. Kani noted that Japan's largest gas importer gets around 5% of its LNG from the Middle East, down from over 50% previously.
US exporters offer competitive pricing for long-term contracts linked to Henry Hub, and abundant shale output has kept US benchmarks relatively low. American cargoes can be flexed between Asia and Europe, giving buyers flexibility in their supply chain.