Shizuoka Gas Signs 7-Year LNG Contract at 12% to Brent Starting in 2027

Shizuoka Gas has finalized a term contract for LNG supply over seven years, beginning April 2027, at a price of 12% slope to Brent crude oil. The company will purchase five cargoes annually on a Delivered Ex-Ship (DES) basis.

This contract comes as several of Shizuoka Gas's existing agreements are set to expire, including contracts with Malaysia LNG Dua, JERA, Prelude FLNG, and North West Shelf. Additionally, Shizuoka Gas has a binding 12-year LNG supply agreement with Australia's Santos, starting in 2032, for 350,000-400,000 metric tons per year. The trend among Japanese utilities is shifting from using Japan Custom Cleared crude oil prices to Brent crude benchmarks for LNG contracts to facilitate better hedging strategies as they increase participation in spot trading.