U.S. investment bank JPMorgan Chase warned that new global gas price lows will demolish producer profits as top Asian consumers freeze big purchases and rework or ditch existing import deals. In a client note seen by Reuters, the bank spells out the changing strategies of the world’s top liquefied natural gas (LNG) importers — Japan’s JERA and South Korea’s Kogas — emboldened by surging supply to demand concessions from producers facing a decade of pain. These include breaking away from oil-indexed LNG supply deals, which tend to be costly, and abolishing restrictions that currently bar buyers from diverting or re-selling cargoes. “Sellers may be forced to offer buyers contract offtake flexibility as demand growth slows, providing continued challenges to producer profitability especially those exposed to lower-tier buyers,” JPM’s head of Asia oil and gas equity research, Scott […]