Russia’s largest natural gas production company, Gazprom (NASDAQ:$OGZPY) and Japanese trading firm Mitsui & CO (NASDAQ:$MITSY) have officially signed an LNG (liquefied natural gas) cooperation agreement on Thursday morning.

Gazprom stated: “The document reflects the parties’ striving toward cooperation in production, transportation and marketing of small and medium-scale LNG on the territory of Japan, as well as LNG bunkering in the Sea of Japan.” It is worth noting that Japan accounts for 35% of total LNG imports worldwide.

Gazprom also clarified certain provision in its memorandum of understanding with the Japan Bank for International Cooperation, signed last year.

The significance of Gazprom and Mitsui’s agreement is underpinned by drastic changes in the LNG industry, as companies have increasingly begun to move away from long-term fixed destination contractions for the commodity.

Rather, the largest buyers of the commodity, Japanese and Korean firms, are signing full or partial short-term contracts that are linked to LNG price indices.

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