Qatargas sells first LNG spot cargo to Japan
Qatar is becoming more commercially savvy, using traders and tenders to seize new customers, and fighting to hold on to its share in its prized Asian LNG market
Qatargas has sold its first liquefied natural gas (LNG) spot cargo month to Japan's JERA Co, the world's top LNG buyer.
Qatargas, the world's biggest LNG exporter, said in a in a statement that it had agreed with Japan's newly established JERA Co. Inc. on the first spot LNG cargo purchase.
The spot cargo was delivered to the Futtsu LNG Terminal in Tokyo on May 13, it added.
"With JERA's inception, Qatargas will deliver a total of nearly seven million tonnes per annum of LNG under a long-term supply contract to this new entity."
Last month JERA said it will shun contracts with destination restrictions as of now, as it wants the flexibility to re-sell cargoes in today's oversupplied market.
While most still have to accept contracts that confine deliveries to a single port, LNG buyers have long protested the restraints that destination clauses place on their supply management, that is, until a vast surplus of supply developed over the last two years.
This has resulted in many importers now opting to buy increased cargoes on the spot market, while sellers have become amenable to granting flexibility on destination in an effort to get clients to commit to or remain in long-term supply agreements.
Qatar is becoming more commercially savvy, using traders and tenders to seize new customers, and fighting to hold on to its share in its prized Asian market, which accounts for almost three quarters of the global market and pays the highest prices.
However, in the coming five years Qatar could be overtaken by Australia as the world's top supplier of LNG, a shift which threatens its dominance in Asia.