Woodside Petroleum is considering sales of some of its liquefied natural gas (LNG) on a fixed-price basis, the chief executive of Australia’s largest independent oil and gas producer told reporters at a conference in Japan.

LNG supply contracts need to evolve by diversifying their pricing basis, particularly for new entrants into the market, said Peter Coleman at a Gastech press briefing.

"We’ve talked about a lot of innovation in our business models but the reality is that the way we contract hasn’t changed very much at all," he said, adding that most supply contracts were still linked to oil prices.

Woodside has been considering the fixed-price structure, especially for buyers in developing markets as it gives these new participants surety of supply and price, Coleman said.

"It is something we are looking at for parts of our portfolio," he said. Coleman said he would be comfortable having between 20 and 30 per cent of Woodside’s LNG portfolio being sold on a fixed-price basis, but with shorter contract periods to mitigate risk. The need for more diversity in LNG pricing comes amid an overall push for contract flexibility in the industry. Last month, the biggest buyers in the world’s top three LNG consuming countries – Japan, South Korea and China – clubbed together to push for more flexible supply contracts.