Innovations in LNG Contracting

The global expansion of LNG trading has triggered fundamental changes to contractual arrangements in the LNG industry. The recent proliferation of short-term deals, in particular, has challenged the predominance of traditional long-term contracts. Despite an increasing relevance of short-term alternatives, +10-year LNG Sale and Purchase Agreements (LNG SPAs) will likely remain the key contractual mechanism for international LNG sales in the 2020s.

The purpose of this webinar is to discuss changing terms in LNG SPAs, with focus on contracts for deliveries to emerging Asian LNG markets. The webinar will explore the key innovative features in Asian LNG SPAs such as novel pricing mechanisms, recourse to price review arbitration, and enhanced termination rights, including in the event of force majeure.

The webinar will also discuss the impact of the COVID-19 crisis on the evolution of contractual arrangements in the LNG industry, highlighting that the recent market events have exposed three key needs for changes to Asian LNG SPAs: (1) to abandon oil-linked pricing, (2) to increase operational flexibility, and (3) to re-examine contract adjustment mechanisms.

If you have any questions, please email Sarah Blanford at [email protected].

Click here to view the webinar recording

Click here to view the Q&A recording

Overview of the US-Asia Gas Partnership (AGP)

In 2019, the U.S. Agency for International Development (USAID) launched the U.S.-Asia Gas Partnership (AGP). AGP convenes a diverse set of stakeholders to optimize gas network infrastructure planning, in collaboration with the U.S. Energy Association (USEA) and the National Association of Regulatory Utility Commissioners (NARUC), to develop domestic gas markets in Asia. AGP supports strategic planning to promote the development of resilient and least-cost power systems that will continue to meet demand over time.

The objective of the AGP is to share best practices in the development of secure, reliable, and economic sources of natural gas. Practical training and strategic advice targeted at ministries and regulators aims to drive more informed policy and decision-making. With a long-term vision to enable the creation of a regional gas market, the AGP will facilitate a shared understanding between government officials and the private sector about the technical, commercial, and economic factors that spur investment.

Speakers

Agnieszka Ason

Visiting Research Fellow
Oxford Institute for Energy Studies