Value of long-term LNG contracts: A theoretical and empirical study

With the rapid development of short-term and spot trade liquefied natural gas (LNG), market is gradually evolving from regionalization to globalization. At same time, existence rationality long-term LNG contracts have become increasingly controversial. To explore value in process globalization, this article constructs a two-stage game model applies China’s data 2018 model. The study shows that, compared with complete import LNG, even if do not price advantages, importing an appropriate amount may help increase total imports, reduce thus improve benefits. Besides, moderate conducive establishment stable flexible supply system security imports. Therefore, importers should underestimate or ignore while actively participating gas.