Negotiation and Pricing of Successful Gas and LNG Contracts
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Negotiation and Pricing of Successful Gas and LNG Contracts Course
Introduction:
The LNG industry has been influenced by various factors such as LNG trading, market mechanisms, shifts in North America's market, shale gas, incidents impacting LNG supply, and producing countries becoming consumers. These factors have left lasting impacts on the industry, shaping future contracts.
The global oil and gas industry involves trading pipeline gas and LNG across Africa, Europe, the Middle East, Asia, and North America. Rapid market growth resulting from demand and deregulation has created significant business opportunities for government entities, producers, sellers, transporters, buyers, and other stakeholders. However, high contract values, complex commercial terms, volatile prices, cultural differences, and unforeseen risks have made contract negotiation, dispute resolution, and risk management increasingly challenging.
Course Objectives:
At the end of this training course all participants will be able:
- Understanding common contractual pitfalls in LNG contracts
- Negotiate profitably LNG contracts, with a clear understanding of insurance provisions, liability and indemnity clauses
- Enhance your ability to draft and negotiate LNG force majeure clauses
- Assess and manage risks as relevant to LNG contracts
- Grasp and apply dispute resolution methods to LNG contracts
- Mitigate Risks
- Addresses the key skills required to draft and negotiate modern Gas and LNG agreements and also learn how to establish a risk matrix and how to deal with risk in contracts.
- Gain Better Position
- Explains pricing mechanisms in various regional gas markets and their effect on Gas and LNG agreements to attain a better position in the contract.
- Avoid Disputes
- Show how the different agreements work with each other on a back to back basis and highlight the mechanisms of dispute resolution.
Who Should Attend?
The audience for this training course will be:
- 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
- People who desire to get a quick yet deep and structured instruction in LNG matters
- People involved in handling LNG & Gas matters
Course Outlines:
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
- Mandatory elements of a legally enforceable contract
- Contract Law: Contract formation
- Contract Law: Contract terms
- Contract Law: Interpretation of contract terms
- Contract Law: Remedies for breach of contract
- Assessing available remedies for breach of contract
- Rescission
- Compensatory damages
- Consequential and incidental damages
- Liquidated damages
- Specific performance
- Injunctive Relief
- The Essence of the LNG and Gas Sales Contract
- The Contractual Chain in Gas Development
- Current Practice in Gas & LNG Sales Contracts
- Price Terms in Pipeline Gas Contracts
- Price Terms in LNG Contracts
- European Traded Gas Markets
- Effect on Global Gas Prices of Deregulation in the European Gas Industry
- The US Gas Market
- Dispute Resolution
- Case Study
- Key Negotiation Skills
- Economic Assessment of Gas Contracts
- Risk Assessment of Gas Contracts—Identification & Handling of Risk
- Exercise
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
- Gas delivery procedures and coordination between suppliers, terminal operator, transporters, and users
- Types of dispute resolution vehicles
- Importance of the dispute resolution clause
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