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Vivien Yang -- Long-term LNG contracts good for Asia

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An LNG carrier in Tokyo Bay, off Yokosuka, south of Tokyo   © Reuters

Long-term contracts have formed the foundation for the growth of the liquefied natural gas market in Asia. These agreements have helped support investments in projects because LNG resource developers are financially assured that they can sell a certain quantity annually under the contract terms. For better or worse, producers and buyers are in this together and will need to engage with each other to meet market challenges over the duration of the contracts.

Asia represents more than 70% of global LNG demand, with north Asian LNG importers in Japan, South Korea and China accounting for most of the global market growth in the past decade. But these long-term contracts have been criticized, for several reasons.

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