Why BHP wants to change LNG pricing

They did it with coal and with iron ore. Now the world’s largest miner, BHP Billiton, wants to change the way LNG is priced. The head of BHP’s marketing division says he favours a system where LNG trades on its own fundamentals rather than being linked to the oil price. Customers of LNG, especially the Japanese, have been increasingly vocal in their support and they have a point. There is no rational reason why LNG prices should be linked to oil. It is the result of a historical quirk. The two fuels aren’t competitors: LNG is a generation fuel and...

They did it with coal and with iron ore. Now the world’s largest miner, BHP Billiton, wants to change the way LNG is priced. The head of BHP’s marketing division says he favours a system where LNG trades on its own fundamentals rather than being linked to the oil price.

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