To the extent that the parties can anticipate and agree on certain changes in circumstances that could distort the expected balance of their agreement and its operation, it is not uncommon for international trade agreements to mitigate these effects by adding specific provisions. In many cases, these provisions provide that, given the amended circumstances (taking into account the discipline of good faith undertakings and appropriate efforts), and in the absence of agreement, the parties agree to an arbitration decision to resolve their disputes. Traditionally, liquefaction projects have been linked to the development of upstream gas resources – and gas was put on the market from an isolated site. However, in the United States, there is an active competitive gas market that LNG players can easily use to access the U.S. shale gas base and the accompanying pipeline network. U.S. LNG projects thus dissect access to liquefaction resources, allowing the use of different business models – capacity toll agreements. Liquefied natural gas (LNG) is often seen as a portfolio commodity in which a participant can split several long-term sales contracts into short-term transactions in order to optimize transportation costs and reconcile supply obligations with market conditions. The LNG industry also has its own spot market, in which cargoes are purchased and sold through competitive tenders and negotiated transactions. Alternatively, swap agreements (for which two buyers or two sellers accept the exchange of cargoes) are another business model that is becoming more common in the LNG industry. Contracts for the sale and purchase of LNG (PSP) generally take much longer than equivalent pipeline contracts. Given the very high sums of money and risks and the long duration of the agreement (usually 20-25 years), this is not surprising.
This five-day course will give you a deeper understanding of the related business and contractual issues, as well as identifying and mitigating risks. The course focuses on the SPA itself, but also on the Spa`s relationship with other agreements in the LNG project, from the gas field to the buyer`s absorption and evaporation facility. Long-term sales contracts – usually for a 20-year term – the long-term LNG sales contract remains the traditional guarantee for financing the LNG capital-intensive value chain. Most of the world`s LNG volumes are sold under long-term contracts. In the absence of concrete language, the law will only provide relief to a party who sees itself as economically difficult or unfavourable. The law will find just as slowly that the contract expired in these circumstances, unless the parties expressly provided for it in their agreement. Short-term sales contracts – bilateral agreements of one to five years, often with little flexibility of terms This practice note takes into account the nature and extent of arbitration agreements with a particular focus on arbitration agreements under the law of England and Wales, although it has also discussed the concept of an international perspective and contains some examples of comparison of other typical SPAs complexity, but parts of this document may not be expressed in detail, despite the inevitable length of negotiations.