Japan’s interest in importing U.S. natural gas from shale with contracts linked to the U.S. benchmark at Henry Hub threatens as many as 50 liquefied natural gas projects in Australia that rely on oil-indexed prices, Hartland Shipping Services Ltd. said. The following are comments from the London-based shipbroker in a report dated March 1.
“A move to spot and short-term gas-linked pricing arguably cannot underpin the long-term financing and return expectations of many developers. America is shaking things up.”
“Japanese, Korean and Chinese buyers are pulling back from supporting pricey Australian and other LNG projects that need the old Asian pricing formula to turn a profit, preferring instead to exploit the arbitrage of buying cheaper U.S. exports.”
“Japan was a hesitant mover in America as the only one of 17 U.S. LNG export projects so far approved, Cheniere’s Sabine Pass in Louisiana, has presold its production to Korean, British, Indian and Spanish buyers.”
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