Australia’s Woodside Energy and Japanese utility Jera announced a proposed five-year contract that differs from most LNG agreements.

Woodside will supply Jera with 200,000 metric tons of LNG a year over the course of the contract, but only during the cold months of December, January and February, according to a Reuters report.

The companies announced the non-binding heads of agreement during the LNG Producer-Consumer Conference in Tokyo, an event organized by the country’s industry ministry and the International Energy Agency.

If approved, the deal will begin in 2027. Most LNG contracts are for longer terms and cover the full length of the year.

A spokesman for Japan’s Ministry of Economy, Trade and Industry told Reuters that the deal gives Jera flexibility, allowing the company to guarantee an extra LNG supply during periods of high demand.

Most U.S. LNG producers have built their facilities with the financial security of 20-year supply contracts. However, as the global LNG market continues to develop, several analysts have predicted an emerging trend of customers looking for shorter contracts.

In a March S&P Global report, analysts predicted the global market shifting as more LNG production comes online in 2026, loosening the market.

“The anticipated shift in supply dynamics has led buyers, especially in price-sensitive markets, to seek shorter-tenure contracts to address immediate needs while negotiating separate agreements for the period when LNG prices are expected to drop,” the S&P report said.

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