Three Asian LNG-import giants that together buy a third of the world’s total output are stepping up their bid to challenge trading restrictions and to maximise their buying clout, on Thursday signing a memorandum of understanding to “co-operate in the joint procurement of LNG”.
JERA, Korea Gas (Kogas) and China National Offshore Oil Corp (CNOOC) will work to secure more flexible terms from their suppliers, as the LNG oversupply shifts the balance of power from seller to buyer. The agreement will strengthen their hand in negotiations with supplier states including India, Qatar and Australia.
The three buyers want to make procurement more flexible, to challenge the destination clauses that forbid them to resell surplus cargoes to third parties.
Japan-based JERA is the world’s largest LNG importer, formed by the 2015 merger of Tokyo Electric Power (Tepco) and Chubu Electric. It said in a statement that the MoU will allow the three companies to discuss destination restrictions and other market issues.