Introduction

The oil and gas industry is global in nature, and it involves trading Pipeline Gas and LNG in Africa, Europe, the Middle East, Asia, and North America. These markets have grown exponentially as a 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 the public and private sectors. In response to such industry dynamics, including consideration to the COVID-19 Pandemic, 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 the participants to gain an insight into the way in which Buyers and Sellers view and negotiate Gas and LNG Sales Agreements, and will give the participants a detailed understanding of the terms that are important in these transactions.

This ETC training course will highlight:

  • 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, including re-negotiation of contracts in light of COVID-19 Pandemic

Objectives

This ETC training course aims to provide an overview of the LNG contracts and its context within the oil and gas industry, to understand how to negotiate profitably key LNG contracts, to assess, and manage pricing and overall risks, and to understand the application of Alternative Dispute Resolution (ADR) relevant to LNG contracts.

At the end of this ETC training course, the participants will learn to:

  • Understanding common contractual pitfalls in LNG contracts
  • Negotiate LNG contracts profitably, with a clear understanding of insurance provisions, liability, and indemnity clauses, with a case study based on COVID-19 Pandemic
  • Enhance the 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

Training Methodology

This training course will provide the participants an perfect opportunity to advance and sharpen their skill sets in planning, negotiating and drafting LNG Contracts through an interactive session with role-playing, case studies, group discussions, and scenarios building and the high-point of the training course being a simulation exercise of oil and gas contracts negotiation involving interactive role play by the participants.

The objective of the interactive role-play is to enable participants to apply the knowledge and understanding gained at the workshop to negotiate a more effective LNG contract. This will help the participants to gain practical insights into managing the risks and enhancing their rewards.

Organisational Impact

This training course offers a unique opportunity to rapidly increase your understanding of the LNG contracts and improve your negotiation techniques, and skills in drafting a variety of related contracts for professionals involved nationally and internationally in the oil and gas industry.

The organisation will benefit from this training course through:

  • Gaining expertise and improving knowledge and skillsets of personnel dealing with areas of legal risks in handling LNG contracts
  • Various workshops and exercises the ability to appreciate and understand the current international practices in LNG contracts
  • How to mitigate risks in LNG contracts
  • Enhancing the contract personnel negotiation skills
  • Entering into gas and LNG contracts post COVID-19 Pandemic

Personal Impact

The participants will gain knowledge by attending this training course, as a result:

  • A unique opportunity to rapidly increase your understanding of the international practices relevant to LNG contracts
  • Improving the negotiation techniques and skills in drafting a variety of related LNG contracts
  • Managing and mitigating legal risks associated with LNG contracts
  • Choosing the most appropriate form of dispute resolution and how to draft a suitable Alternative Dispute Resolution (ADR) clause
  • Enhancing your ability to negotiate and manage claims and disputes with confidence

Who Should Attend?

The ETC training course is specifically designed for professionals actively involved or likely to be involved in contract negotiations and all those who need an understanding of the principles of gas contracts, including issues such as price terms and the allocation of risk.

This ETC training course is suitable for a wide range of professionals but will greatly benefit:

  • Senior and Middle-Level Commercial Managers
  • Commercial Lawyers
  • Risk Managers
  • Energy Purchasing Managers
  • Strategy Managers
  • Pipeline Marketing Managers
  • Operations Managers
  • Project Managers
  • Senior Government Officials and Regulators

The Course Outline

Day One

Dynamic of Downstream, Midstream, and Upstream and English Contract Law

  • Introduction to LNG and Sales Contracts
  • Objectives
  • Key Terms and Definitions
  • The Main International Industry Players
  • Introduction to specific LNG and Sales Agreements, with reference to worldwide industry impact due to COVID-19

Legal System and Contract Law

  • Mandatory Elements of a Legally Enforceable Contract
  • Contract Formation
  • Contract Terms
  • Interpretation of Contract Terms
  • 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

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
    • Current Issues in LNG

Transportation Agreements

  • The contractual arrangements put in place for getting petroleum from the wellhead to the marketplace
  • Off taking and Transporting Oil & Gas (Pipeline or Ship)
  • Typical terms of a Gas Pipeline Transportation and Processing Agreement (TPA)
  • Transportation (or Transshipment) of crude oil and Liquefied Natural Gas (LNG) or Gas to Liquids (GTL)
  • International Practices and Model Contracts

The Essential of Negotiations in LNG context

  • Meaning of Negotiation Mean
  • Types of Negotiation
  • Issues to be Negotiated
  • The Negotiation Process
  • Style, Strategy, and Tactics
  • Persuasion – The Role of Argument
  • Re-negotiation of Existing Contracts – In light of COVID-19 Pandemic

Day Three

Gas Sale and 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
  • Force – Majeure in Gas Sales Contracts – The differences between Pipeline Gas and LNG
  • Termination
  • Tax

Storage Agreements

  • Key Clauses
  • Drafting and Negotiations

Liability Clauses

  • Drafting Enforceable Liquidated Damage Clauses
  • Handling Consequential Damage Waivers
  • Mitigation of Damages Clause
  • Contractual Limitations Periods

Contractual Indemnity

  • Negligence
  • Strict Liability
  • Unseaworthiness
  • Pre – Existing Conditions
  • Arising out of
  • Legal Fees
  • Invitees
  • Punitive Damages

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

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

Day Five

Contract Claims and 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
  • Contract Close – Out
  • Contract Review, Evaluation, and Lesson Learned
  • Overview and Conclusion

Trying to find a training for yourself?
Are you looking for a custom solution?

Call us now and transform your career today