A structural shift is taking place in the global liquefied natural gas (LNG) market, with China increasingly adopting U.S. Henry Hub pricing for new long-term import contracts.
This trend contrasts with intense Beijing-Washington trade tensions and the imposition of 15% tariffs on LNG imports from the US from February 2025. However, large Chinese companies are opting to ensure price stability over a multi-year horizon, relying on the more mature U.S. gas index.
An indicative example of this new approach is the 15-year agreement recently signed by the Guangdong Pearl River Investment Management Group (GPRIMG) with the American ConocoPhillips. The contract provides for the annual supply of 300,000 metric tons of LNG from 2028, priced at 121% of the Henry Hub price, plus a fixed premium of around $4.50 per million British thermal units (MMBtu).
At the same time, Guangzhou Gas Group has signed a five-year contract with Mercuria Energy Trading, which starts in 2026 at pricing based on the Japan Korea Marker (JKM) – the dominant Asian index – but is moving to the Henry Hub from the second year, suggesting the trend of switching to US pricing standards.
From tariffs to indirect reconnection
The new agreements take on particular significance considering that China – one of the largest traditional importers of U.S. LNG – had suspended direct imports due to tariffs. Many Chinese companies had resorted to indirect exports to Europe in order to avoid the additional costs of customs charges.
The return to Henry Hub-referenced contracts marks a cautious but clear strategy of reconnecting with U.S. energy markets from Beijing, focusing on long-term energy security and diversifying pricing sources.
Structural change in international LNG markets
Until recently, most Asian LNG contracts were linked to crude oil prices, ensuring stability through the oil market. The shift to gas markets, such as the Henry Hub, reveals profound shifts in pricing preferences, with China playing a catalyst role.
If this approach becomes permanent, U.S. competitors in the LNG market — including Russia, Qatar and Australia — may be forced to revise their pricing policies in order to maintain their position in the Chinese market.
Towards a new trade balance framework
The integration of the Henry Hub into Chinese LNG contracts is a foretaste of how global energy trade could be reshaped. Instead of the traditional separation into "oil" and "gas" markets, the new era is characterized by hybrid pricing models and geoeconomic adjustments.
In this new landscape, the United States is reappearing not only as an LNG producer, but also as a pricing "regulator", through the influence of the Henry Hub. China, for its part, seeks to leverage the diversity of options to shield its future energy security.
In conclusion, China's shift towards the use of the Henry Hub index to determine LNG prices highlights a significant shift in the way global gas trade is priced and managed, which is expected to reach both the European and, by extension, the Greek gas market.
