Professional Documents
Culture Documents
Sellers Concerns
Timely Commencement of
Supply
Timely Commencement of
Buyers Facility
Availability of Quantity
Security of Payment
Reliability of Supply
Quantum of Demand
Flexibilities in off-take of
LNG
Reliability of Transportation
Quality of Gas
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COMMERCE OF LNG
BUYER
LENDER
SPA
SELLER
SHIPPER
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SHAREHOLDERS
LENDERS/ PAYMENT
SECURITY
LNG SUPPLIER
SHIPPING TIME
CHARTER
REGAS TERMINAL
MARITIME
BOARD
Sellers Risks
Volume Risk
Price Risk
Risk of payment
Currency Risk
Risk of flexibility of supply Price Risk
Risk of transport default Risk of aberrant
nominations
Risk of Force Majeure
Risk of project completion Risk of transport default
Risk of Force Majeure
Risk of assignment
Risk of project
Political Risk
completion
Environmental Risk
Risk of Gas quality
Risk of assignment
Political Risk
Environmental Risk
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TYPES OF CONTRACT
Long Term SPA/GSPA
Short-Medium Term SPA/GSPA
Spot Master SPA/GSPA with Confirmation notice
HOA & Term Sheets-Binding/Non Binding
reserves
schedule
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LNG/GAS CONTRACTS
Articles / provisions could be broadly classified in to four
parts :
1.
2.
3.
4.
General
Commercial
Technical
Legal
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Preamble
Conditions Precedent
Notices
Details of Performance.
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vaporization facilities.
Creditworthy Market.
Commercial framework.
Arrangement for ships if contract is on FOB basis.
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facilities by supplier.
of Ex-Ship contracts.
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Sources of Supply.
Financing
Quantities.
Transportation.
Programming of Deliveries.
Additional Matters.
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Transfer of Title
Liabilities
Confidentiality
Sovereign Immunity
No Intermediaries.
Force Majeure.
Assignment
Applicable Law
Arbitration
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FORCE MAJEURE
Events not within Control of affected party not caused by
TITLE TRANSFER
In case of FOB contracts at Load Port
In case of DES Contract- At discharge port/outside the
Customs Frontier
Concern from LNG suppliers
Some suppliers look at CFR Model with invoicing on the
basis quantity unloaded
Taxation and Insurance issues
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CONTRACTUAL QUANTITIES
Upward Flexibility.
Restoration Quantities.
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Additional matters
Status of most favoured buyer
Change in circumstances
Provision of reopener
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LNG PRICING
LNG pricing is the most important clause in Sale Purchase
Agreements.
basket.
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LNG PRICE
Region
Linkages
North America
UK
NBP
Europe
Competing Fuels
(Heating Oil, Gas Oil,
Pipeline Gas)
Asia-Pacific
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Contd...
Ceiling
Floor
Contd...
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to NBP.
supply.
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Thank You
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