About the Event
HALF-DAY OPTIONAL WORKSHOP - LNG Sales & Purchase Agreements
(Afternoon 2.00pm - 5.00pm)
Negotiating and drafting long term LNG sales contracts which address and allocate the risks of the “well-head to burner-tip” chain in a commercially balanced and “finance-able” manner is a challenge in today’s evolving LNG market.
The last decade has seen unprecedented growth in the international LNG trade, the opening of a variety of new import markets, the development of a number of new commercial models in the LNG trade and substantial changes to the terms upon which LNG has until recently traditionally been sold. The next decade (particularly in Asia) is likely to see even more spectacular developments, in the development of new models for the trading and sale of LNG, in the physical infrastructure needed to deliver LNG and in the sources of feed gas. Shale gas has pushed LNG supplies from North America to a hungry Asia, but there are predictions that there will be very significant levels of shale production in Asia by 2020. At around the same time the predicted level of LNG supply meets the predicted level of LNG demand. In the interim there is a greater variety of buyers looking to acquire LNG, and a greater variety of LNG sellers in the market than we have ever seen before. How does one contract on a long term basis in a way that will withstand the pressures a long term contract is likely to face?
Buyers wanting to negotiate in the next 12 to 18 months for long term LNG supplies to commence delivery in 2014-2018 need to understand the options available to them in such a dynamic market and the stresses that the evolution of the market will have on their long term contract over the next 20+ years.
In this workshop you will learn about the key issues facing LNG buyers and sellers today and explore different approaches to dealing with these issues, including looking at specific drafting on some of the key SPA provisions.
Key Issues to be Covered
The LNG Sales and Purchase Agreements Workshop will cover:
- Structuring issues: A discussion of different commercial structures and business models and the issues that arise.
- LNG contracting trends: how are the issues faced in the industry being addressed in the long term contracts?
- New buyers and new sellers: how the identity of the seller and buyer influence the SPA terms
- Detailed analysis of key SPA terms
- Quantities (flexibility, make up, take or pay)
- Take or pay or liquidated damages; pros and cons of different liability regimes
- Pricing mechanisms, regional preferences, future trends?
- Price review clauses and SPA duration
- Seller’s liability for late/non-delivery
- Destination restrictions/flexibility, cargo diversions and profit sharing mechanisms
- Force Majeure
- Conditions Precedent
- Enhancement of Buyer’s Creditworthiness
- Issues to consider if the seller is an aggregator or buyer will source LNG from more than one project or deliver to more than one destination
- Issues associated with buying LNG derived from coal bed methane
- Practicalities of Concurrent Negotiation of Contracts in the Gas “Chain”: The Role of the SPA
The workshop will consist of presentations by the workshop leader, with time for questions and answers and an interactive review and discussion of sample clauses covering some of the more topical SPA issues from a hypothetical buyer’s and seller’s perspective. The cost is S$950 per person plus 10% discount if you wish to attend both the conference and workshop.