As global LNG prices show signs of stabilising, Asian buyers have initiated negotiations for long-term contracts, Platts said.

• JKM prices have fallen below Brent linked contract pricing since Jan, fuelling renegotiations. Some divergence between oil and LNG markets are a key factor in changing the Brent linkage.
• Around ten long-term contracts have been signed since January, at least three linked to Henry Hub.
• Asian buyers signing Henry Hub-linked contracts basis DES have negotiated contract slopes ranging from 119%-121%, sources told Platts.
• The pricing mechanism includes a constant factor covering liquefaction and freight – around $4.5/MMBtu.
• However, Henry Hub could hit $4/MMBtu by 2027 according to the forward curve, while LNG prices should see downward pressure from 2025 due to new supply online. This could render Henry Hub-linkage uncompetitive.
• Consequently, there is keen interest to spread out price risks by including a combination of Brent, Henry Hub, and JKM into contract pricing.

Source: S&P Global Commodity Insights