LNG
Liquefied Natural Gas is natural gas cooled to -162 degrees Celsius for efficient long-distance transport by specialized tankers. Global LNG trade has surged as nations diversify energy supplies. Major pricing hubs include the JKM (Japan-Korea Marker) and Henry Hub-linked contracts.
- Lean LNG
- Rich LNG
- Standard Specification
- FOB
- DES
- CIF
LNG, in brief.
- Common origins
- Qatar
- Australia
- United States
- Russia
- Malaysia
- Common destinations
- Japan
- China
- South Korea
- India
- Spain
- Grades and specifications
- Lean LNG
- Rich LNG
- Standard Specification
- Incoterms
- FOB
- DES
- CIF
- Unit of measure
- MMBtu
What moves LNG pricing
LNG pricing splits across three regional benchmarks: TTF (Dutch Title Transfer Facility) for Europe, JKM (Platts Japan/Korea Marker) for Northeast Asia, and Henry Hub-linked for US Gulf cargoes. The TTF-JKM spread determines whether Atlantic basin cargoes ship east or stay in Europe. Henry Hub plus 115% plus shipping is the indicative US export breakeven. Winter heating demand in Asia, European storage levels (the AGSI tracker is critical), and unplanned outages at Gorgon, Sabine Pass, or Yamal can move JKM by $5-10/MMBtu in days.
How LNG cargoes are priced and settled
Long-term LNG SPAs run 15-25 years with destination flexibility a key negotiated point. Spot trade is in standard 3.4 TBtu cargoes (about 170,000 cubic meters of LNG). Pricing structures include slope-to-Brent (legacy oil-indexed for Asian buyers), pure Henry Hub plus toll, JKM-linked, and TTF-linked. The JCC (Japan Crude Cocktail) still anchors some Asian volumes.
LNG specifications and dispute practice
LNG quality is specified as gross heating value (GHV), Wobbe Index, and contaminants (mercury, sulfur, CO2). Receiving terminals have specific GHV bands: too rich an LNG (high C2+) won't pass Japanese terminal specs. Disputes around boil-off allowance, ship's vapor pressure on arrival, and quality at custody transfer occupy most cargo operations attention.
Where LNG comes from and where it goes
Top exporters: Qatar, US, Australia, Russia (sanctions-restricted), Malaysia, and Nigeria. Top importers: China, Japan, South Korea, India, and Europe (especially Germany, France, Italy, Spain after the 2022 Russian pipeline collapse). New US capacity from Plaquemines, Corpus Christi Stage 3, Rio Grande LNG, and Port Arthur is reshaping Atlantic trade through 2026-2027.
Who trades LNG?
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Related market pages.
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- Crude Oil (WTI)West Texas Intermediate is the primary benchmark for North American crude oil pricing. WTI is a light sweet crude with an API gravity of around 39.6 and sulfur content below 0.24%, making it ideal for gasoline refining. It is delivered and priced at Cushing, Oklahoma.
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- Fuel OilFuel oil is a heavy residual product of crude oil refining, used primarily in marine bunkering, power generation, and industrial heating. The IMO 2020 regulation shifted demand toward very-low-sulfur fuel oil (VLSFO), while high-sulfur fuel oil (HSFO) remains traded for scrubber-equipped vessels.
- Jet Fuel (Aviation)Jet fuel, primarily Jet A-1, is a kerosene-type aviation turbine fuel meeting stringent international specifications for flash point, freeze point, and thermal stability. Global demand exceeds 300 million metric tons annually, driven by commercial and military aviation.
- LPGLiquefied Petroleum Gas is a versatile hydrocarbon fuel comprising propane and butane, used in residential cooking, heating, petrochemical feedstock, and automotive fuel. LPG is transported in pressurized vessels and traded on both spot and term-contract bases from major Middle Eastern and US producers.
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