This report is the first step in an iterative process involving an industry task force established by the Energy Charter Secretariat, and is intended to provide a basis for a discussion of key issues relating to the potential standardisation of LNG SPAs. This review is primarily focused on medium to long term LNG SPAs, but it may also be applicable to certain spot contracts. In considering the standardisation of LNG SPAs, the intention is not to take into account specific market factors, such as whether there is (or is perceived to be) under or over supply of LNG in the market, or any other market related issues, now or in the future. It is considered that standard contracts and provisions should be equally applicable in all market situations.
Its main conclusion is that the development of a fully standardised LNG SPA for universal application is not currently feasible. However, certain key “trends and issues” could be addressed by standard provisions, which could then form the basis of a model contract that is developed over time.
The report, preliminary drafted by members of the LNG team of Baker Botts, benefited from the comments and input provided by several external experts, industry participants (from both consumer and producer sides, as well as financing), governments and organisations (GIIGNL, IOGP); in particular during the specific workshop held at the Secretariat on 29 September 2017 and during several LNG events in 2017 (Tokyo Gastech and 8th Turkmenistan Gas Conference).