The Utilities That Buy LNG on Long ContractsNarrow moat
Mitsubishi Corporation (8058) — moat facet
Mitsubishi's best customers sign for years at an oil-linked price and buy regardless of the spot market.
Most of Mitsubishi's LNG is sold on long-term contracts with prices linked to crude oil1. The buyers are utilities and gas companies, many of them in Japan, that signed for security of supply. The Asia-Pacific natural gas and LNG businesses earned ¥138.2 billion in the year to March 20262.
These are the steadiest customers Mitsubishi has. They sign for years, pay a formula price, and buy regardless of short-term market conditions. The contracts make the company's LNG profit follow oil — about ¥2.4 billion per dollar a barrel3 — rather than the volatile LNG spot price, which rose above $20 per million Btu during the Middle East crisis4.
The risk is renewal. When a long contract ends, the buyer can choose a different supplier or a different pricing basis.
LNG Canada was built specifically to export to customers in Japan and other East Asian countries5, which extends the same customer base across the Pacific.
The measure is the LNG profit through contract renewals. A fall when contracts roll over would say the buyers have more choice than they did.
The contract structure is unchanged; LNG profit fell with oil prices.
The long-contract business; it follows oil, which fell in the latest year.
Source: Mitsubishi Corporation results presentation, May 2026 ↗- ReportedMost of Mitsubishi's LNG is sold on long-term contracts with prices linked to crude oil.Mitsubishi Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - the consolidated statements of income, financial position and cash flows, the eight-segment note, dividends and the forecast for the year to March 2027. — FY to March 2026 · publ. 1 May 2026 · source ↗
- ReportedThe Asia-Pacific natural gas and LNG businesses earned ¥138.2 billion in the year to March 2026.Mitsubishi Corporation, FY2025 results and FY2026 forecast presentation (1 May 2026) - the LNG, copper and steelmaking coal portfolios with stakes, capacities and production volumes, data centre capacity, the Thai and Indonesian automotive businesses, and Cermaq's salmon volumes. — FY to March 2026 · publ. 1 May 2026 · source ↗
- ReportedThe contracts make the company's LNG profit follow oil — about ¥2.4 billion per dollar a barrel — rather than the volatile LNG spot price, which rose above $20 per million Btu during the Middle East crisis.Mitsubishi Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - the consolidated statements of income, financial position and cash flows, the eight-segment note, dividends and the forecast for the year to March 2027. — FY to March 2026 · publ. 1 May 2026 · source ↗
- ReportedThe contracts make the company's LNG profit follow oil — about ¥2.4 billion per dollar a barrel — rather than the volatile LNG spot price, which rose above $20 per million Btu during the Middle East crisis.Mitsubishi Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - the consolidated statements of income, financial position and cash flows, the eight-segment note, dividends and the forecast for the year to March 2027. — FY to March 2026 · publ. 1 May 2026 · source ↗
- ReportedLNG Canada was built specifically to export to customers in Japan and other East Asian countries, which extends the same customer base across the Pacific.Mitsubishi Corporation, Consolidated Financial Results for the year ended March 31, 2026 (IFRS) - the notes on significant investments: MDP and BMA, Lawson, Eneco, LNG Canada, Anglo American Sur and Quellaveco, with book values and ownership. — FY to March 2026 · publ. 1 May 2026 · source ↗