LNG Contracts and Price Negotiation
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COURSE DATES AND LOCATIONS
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INTRODUCTION
The oil and gas industry is global in nature and it involves trading Pipeline Gas and LNG in Africa, Europe, Middle east, Asia and North America. These markets have grown rapidly as result of demand and deregulation, bringing tremendous business opportunities for all the stakeholders including government entities, producers, sellers, transporters and buyers etc. High contract value, complicated commercial terms, volatile prices, cultural differences and many other unpredicted risks have made contract negotiating, dispute resolution and risk management more and more challenging.
Effective training in these areas becomes an urgent need for relevant executives in both public and private sectors. In response to such industry dynamics, this advanced training course will provide effective training in the critical considerations and conditions for successfully concluding Gas and LNG Sales Agreements. The training course will enable participants to gain an insight into the way in which Buyers and Sellers view and negotiate Gas and LNG Sales Agreements, and will give participants a detailed understanding of the terms that are important in these transactions.
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COURSE OBJECTIVES
At the end of this course you will be able to:
- Dynamic of downstream, midstream, and upstream activities
- Essentials of contract principles
- Gas Sales and LNG Contracts with reference to international model contracts
- Transportation Agreements with reference to international model contracts
- Gas sales and Purchase Agreements
- Contractual risk management issues, insurance, indemnities, liabilities, and force majeure
- Negotiation arts and strategies relevant to LNG contracts
- Understanding common contractual pitfalls in LNG contracts
- Negotiate profitably LNG contracts, with clear understanding of insurance provisions, liability and indemnity clauses
- Enhance your ability to draft and negotiate LNG force majeure clauses
- Asses and manage risks as relevant to LNG contracts
- Grasp and apply dispute resolution methods to LNG contracts
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COURSE AUDIENCE
This course is made for
- Senior and middle level commercial managers
- Commercial lawyers
- Contracts Managers
- Compliance personnel
- Risk managers
- Energy purchasing managers
- Strategy managers
- Pipeline marketing managers
- Operations managers
- Project managers
- Senior government officials and regulators
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COURSE OUTLINE
Day One
Dynamic of Downstream, Midstream, Upstream & Contract Law
- Introduction to LNG & Sales Contracts
- Training objectives
- key terms and definition
- The main international industry players
- Introduction to specific LNG and Sales agreements
- Legal System and Contract Law
- Assessing available remedies for breach of contract
- Rescission
- Compensatory damages
- Consequential and incidental damages
- Liquidated damages
- Specific performance
- Injunctive Relief
Day Two
The Essence of the LNG Sales Contracts
- Characteristics of LNG sales contracts
- The contractual process
- Commercial realities
- Drafts and drafting
- Enforcement
- Fundamental legal principles
- Cultural and language issues
- Fundamental Legal Principles
- LNG Sales Contracts
- What is LNG?
- The LNG Industry
- LNG Value Chain
- LNG Sales, and LNG sale and Purchase Agreements
- Financing of LNG Projects
Day Three
Gas Sale & Purchase Agreements
- Types of Gas Sales Agreements
- Parties
- Term and Effectiveness: Duration and delayed start date provisions
- Sale, Purchase and Delivery
- Gas Reserves
- How to express gas quantities in pipeline gas contracts
- Take-or-pay, Carry Forward and Make Up
- Current practice on shortfall penalties
- Quality
- Price
- Nominations, Undertake, and Overtake
- Measurement and Testing
- Invoicing and Payment
Day Four
Force Majeure Clauses
- Understand the purpose and risks this clause is intended to mitigate
- Avoiding common Force Majeure pitfalls
- Protect yourself from abuse and misuse of this clause
- Mechanics of exercising Force Majeure rights
- Practical Exercise: Case studies
- Insurance Provisions
- Overview of coverage types
- Understanding typical insurance exclusions
- Assessing the quality of your insurance carrier
- Evaluating deductibles and coverage limits
- Insurance subordination issues
- Effective claims management
- Contract Management
- Operational issues
Day Five
Contract Claims & Dispute Resolutions
- Types and Assessment of Claims
- Tiered Dispute Resolution Mechanisms
- Formal Dispute Resolution
- Preventing costly litigation through effective use of ADR option
- Types of dispute resolution vehicles
- Assessing litigation vs. arbitration options
- Mediation considerations
- Considerations for selecting effective mediators and Arbitrators
- Selecting arbitration and mediation rules of procedure
- Drafting effective dispute resolution clause
- Practical Exercise: Mock arbitration exercise
- Contract Close Out
