Energy firms from Thailand, Pakistan and Bangladesh are in active discussions to secure long-term US liquefied natural gas, according to officials at the Gastech conference in Bangkok. Adding to the momentum, China Gas Holdings Ltd. inked a sales contract with Venture Global Inc. slated to commence in 2030, a notable move given the strained US-China relationship.
Price dynamics are pulling buyers in. Company officials said US cargoes tied to long-term agreements are currently landing in Asia at about $8 per million British thermal units, while Asian spot prices sit near $30 per million Btu as Europe and Asia vie for limited supply. Some US contract offers have edged higher, with traders and company executives citing supply chain snags and today's tight market. That, plus a broader push to curb LNG exposure, could slow the pace of signings.
Problems in and around Hormuz have stretched into a seventh month, and before the conflict about a fifth of the world's LNG passed through that strait. Qatar's giant export terminal has largely been down after missile damage, and shipments from Qatar and the United Arab Emirates destined for important Asian buyers have fallen; combined with expensive spot cargoes, that is pushing up utility costs and driving shortages in parts of Asia.
"Buyers around the world really are more focused on diversifying their LNG procurement," said Yukio Kani, chairman of Jera Co. "Some rely too much on Qatar, like more than 50% or 60%." Kani said Jera, Japan's biggest gas importer, has spent the past decade spreading out its sources and now gets roughly 5% of its LNG from the Middle East. Most of Jera's supply comes via long-term contracts, which he argued helps avoid the whiplash of the spot market.
Inpex Corp. Chief Executive Officer Takayuki Ueda said the company is weighing an investment in a US LNG export venture and that flows through the strait "will not return to the previous status quo." "Diversification of our portfolio - in our words, portfolio resiliency - is important," he said. Inpex is also studying projects in South America. Thai company officials at Gastech showed interest in supply from Canada and across the Asia Pacific.
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US exporters are often among the most competitive on multi-year pricing because contracts are linked to Henry Hub, and abundant shale output has kept US benchmarks relatively low. American cargoes can flex between Asia and Europe, giving buyers the option to bring volumes home when needed or resell when other markets pay more.
Shell Plc's integrated gas president Cederic Cremers said Monday that supplies from North America have made up for over 50% of the Middle Eastern LNG volumes absent from the global market this year. The US now leads LNG exports and is projected to nearly double its shipments before the decade closes. Peter Clarke, ExxonMobil Holdings Corp.'s LNG senior vice president, said US LNG could represent roughly 30% of the world's supply by 2030.
Projects such as Woodside Energy Plc's Louisiana LNG and expansions at Cheniere Energy Inc. are marketing volumes for delivery beginning around 2030. And as US Department of Energy deputy secretary James Danly put it at Gastech: "America wants to sell you gas.
There is a glaring two-tier market right now: about $8 per million Btu on US long-term deliveries into Asia versus roughly $30 on the Asian spot market. That spread explains the rush to lock in predictable US-linked deals, even as some contract prices nudge higher and some buyers rethink how much LNG they want overall. For anyone exposed to energy costs, the takeaway is simple enough: supply routes matter, and flexibility plus new US capacity could cushion, but not erase, the price shocks that come when a crucial waterway gets dicey.
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