Japan, the leading importer of liquefied natural gas (LNG), is warning about supplies getting tighter over the coming years due to competitive markets and underinvestment in supply.
Long-term LNG contracts prior to 2026 have all been sold out, a survey of Japanese firms by the country’s trade ministry has found. “The LNG procurement environment has changed completely. Procurement can also be said to be in a state of war,” the companies said to the ministry, according to Business Insider. Such contracts are often the basis of reliable supply and stable prices for many years.
As such, the shortage of these contracts can set the stage for conflict among nations to secure LNG deliveries. The absence of long-term contracts leaves buyers dependent on the more expensive and volatile spot market, where prices are trading roughly three times higher than that of the contracts….