Different contract types can ease LNG price volatility: Shell Asia’s Shah
The different types of contracts that are now available can help mitigate Liquefied Natural Gas (LNG) price volatility. This can be an approach for assuring consumers that runaway LNG prices, as were seen in January 2021, do not hamper prospects for wider adoption of natural gas.
Speaking to Business Standard, Ajay Shah, vice president – Shell Energy Asia said, “These days you have spot, short-term, long-term, and optional contracts. There are contracts that last for one cargo and also those that last for hundreds of cargos. Not only that, we have indexations which are emerging all the time.”
The different types of contracts that are now available can help mitigate Liquefied Natural Gas (LNG) price volatility. This can be an approach for assuring consumers that runaway LNG prices, as were seen in January 2021, do not hamper prospects for wider adoption of natural gas. Speaking to Business Standard, Ajay Shah, vice president - Shell Energy Asia said, “These days you have spot, short-term, long-term, and optional contracts. There are contracts that last for one cargo and also those that last for hundreds of cargos. Not only that, we have indexations which are emerging all the time.” This is an evolution from earlier times when there were simpler contracts for gas supplies from point A to B, with fixed volumes and prices linked to crude oil.