2023 Survey Results

ページ番号1009929 更新日 令和5年11月10日

Results of FY2023 Survey on Destination Clauses and Price Indices in Fixed-term LNG Sales and Purchase Agreements concluded by Japanese companies

10th Nov 2023

Outline of the survey

  • Objectives:This survey is the third year of a follow-up on the contract terms and conditions related to destination restrictions in fixed-term LNG sales and purchase agreements (SPAs) since the Japan Fair Trade Commission's "Survey on LNG Trades” published in June 2017 in view of abolishment or relaxation of destination clauses, which cause a concern for LNG security, based on the "New International Resources Strategy" formulated in March 2020 by the Ministry of Economy, Trade and Industry.
  • Survey Period:June to August 2023 (two-month response period)
  • Survey Targets:A total of 22 Japanese LNG buyers (all companies cooperated with our survey)

<Survey contents>

Survey of the following items for the 9-year period from FY2022 to FY2030  (Annual Contract Quantity (ACQ), not actual figures)

  1. Total ACQ by fixed-term SPAs excluding spot transactions
    All term contract volumes, whether DES/FOB, with or without destination clauses
  2. Take or Pay clauses
    Existence or non-existence of Take or Pay clauses and, if Take or Pay clauses exist, whether or not Make up clause exist.
  3. Price Index
    ACQ by price index employed (JCC, Brent, etc. crude oil price, HH, TTF, JLC, Hybrid, JKM, etc.)
  4. Free description of recent trends, etc.


1. Trend of the destination restrictions in the term contracts

  • The Annual Contract Quantity (ACQ) for which destination restrictions were imposed is to decrease from 33 MT or 42% (total ACQ of 79 MT) in FY2022 to 22 MT or 40% (total ACQ of 55 MT) in FY2030. The ACQ for which destination restrictions were imposed from FY2021 to FY2022 decreased significantly from 53% to 42% of the total.
    • According to the past surveys, the ACQ for which destination restrictions were imposed in FY2016 was 46 MT, 75% (total ACQ of 84 MT), and  in FY2021, 45 MT, 53% (total ACQ of 84 MT), respectively.
  • For the purposes of this study, the following terms are defined as below;
    • “No destination restrictions" is defined as the contract quantity that is the sum of "no destination clauses" and "cases in which diversion of destination to domestic or overseas are allowed and no profit-sharing clauses are imposed”.
    • “Destination restrictions imposed" is defined as the total contract quantity minus the “no destination restrictions" quantity above, which means "cases where a destination is specified" and "cases where profit-sharing clauses exist even if the diversion of destination to domestic or overseas is allowed”.

Figure Trend in destination restrictions / Comparison of destination restrictions

2. Take or Pay clauses and Make Up clauses


  • The ACQ to which the Take or Pay clauses apply was 72 Mt in FY2022, accounting for 91%, but is to decrease to 48 MT, or 88% in FY2030. Of the ACQ with Take or Pay clauses, those with Make Up clauses accounted for 75% in FY2022 and 64% in FY2030.
  • Take or Pay clauses impose an obligation for buyers to pay sellers for all the ACQ except for Downward Quantity Tolerance (DQT), including the quantity that buyers do not actually receive, and it is a contractual commitment by buyers, reflecting the seller's strong position. Make Up clauses provide that the paid-up quantity can be delivered during a certain number of years after the next fiscal year.

Figure Trends in Take or Pay clauses / With or without Take or Pay clauses

3. Total annual contract quantity (ACQ) 

  • The ACQ of the fixed-term SPAs concluded by Japanese companies as of this survey was 79 MT in FY2022 and to be 55 MT in FY2030.
  • As of FY2022, the ACQ for FOB and DES terms and their respective shares were 34 MT or 43% for FOB terms and 45 MT or 57% for DES terms.
  • In FY2030, the ACQ for both FOB and DES terms is to decrease to 28 MT, or 50% of the total.

Figure Trends in ACQ / Comparison of DES/FOB terms

4. Diversity of Price Indices adopted

  • With regard to the price index adopted for term contracts, the price of “JCC, Brent, and other crude oil prices” accounted for 72% (57 MT) in FY2022, but this share is to drop to 58% in FY2030, decreasing to 32 MT.
  • Contract quantity with the Henry Hub and other U.S. spot gas price indices accounted for 14% (11 MT) in FY2022, and increase to 14 MT in FY2030, doubling its share to 25%. The hybrid method, which combines two or more price indices, shows an increase from 3% in FY2022 to 7% in FY2030. The quantity of JKM and TTF contracts decreases toward FY2030 and their share to be small.

Figure Trends in ACQ for price indices / Percentage by price index