The expected growth in the global LNG market in the coming years will mean buyers can do 

without  long-term  contracts,  leading  industry  players  said  late  Tuesday  at  the  Flame 

conference in Amsterdam. 

Instead, with growing volumes of spot LNG available, buyers can either look to shorter-term 

contracts or the spot market to meet their needs. 

Charif  Souki,  chairman at US LNG developer Tellurian Inc., said long-term contracts in the 

LNG sector would soon be a thing of the past. 

"The market has become sufficiently liquid today that a buyer does not need to enter into a 

long-term contract," Souki -- who was the founder of US LNG pioneer Cheniere Energy -- 

said. 

He said that in the next two years, some 20 cargoes would be available every day on the spo

t market, or 5,000 cargoes a year. "You're never very far from a cargo," he said. 

"There is no incentive, no imperative to have a long-term contract," Souki said, unless a buye

r is a large utility that needs the guarantee of supply. 

"You have to prepare yourself for the next generation which is a transition to a true commodit

y business where you don't need a long-term contract. With a 50 Bcf/d market, with LNG on 

the water, I doubt very much the necessity for long-term contracts is going to remain for muc

h longer," he said. 

Tellurian is planning to build the 26 million mt/year Driftwood LNG plant and has tried differen

t methods to market its capacity, including offering to sell its future LNG at a fixed $8/MMBtu 

price to Japanese buyers. 

However, no companies took up the offer. 

"We've tried fixed costs, variable costs, Henry Hub-plus, and now we're trying to find a new 

business model," Souki said.