Official support fails to help Japan LNG contract

The launch of a new forward contract linked to liquefied natural gas (LNG) had been welcomed by the Japanese government amid hopes it might help local buyers manage their risk. But the contract has failed to take off - a sign of the challenges involved in trying to foster interest in LNG derivatives. Gillian Carr reports

The JOE's LNG contract has received a cool reception

In Europe and the US, the development of trading hubs for natural gas has helped settle disputes over pricing, created greater transparency over the market, and offered a mechanism through which buyers and sellers can come together to hedge their risk. In Japan, the government hopes that similar benefits can be unlocked by the creation of a local trading hub for liquefied natural gas (LNG). But so far, such hopes have gone unfulfilled. Industry participants say the structure of the global LNG