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LNG: Are Long-Term Contracts Here to Stay as Spot Market Pricing Balloons?

Bracewell’s Nina Howell discussed with TXF News reporter Aife Howse the future prospects of long-term contracts in the LNG space.

Although long-term contracts traditionally limit a buyer’s ability to take advantage of profitable trading opportunities in response to ever-changing spot prices, according to Howell, long-term contracts are not necessarily what they were 10 years ago.

“We are seeing some creative measures to mitigate against the price risk for buyers associated with long-term LNG supply. One example is Centrica and Tokyo Gas teaming up to buy LNG from Mozambique with the option to direct LNG to either Europe or Asia depending on gas prices in those markets,” Howell explains.

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