Asia Congress on Successfully Negotiating and
Renegotiating Long Term Gas Supply Contracts
27 & 28 February 2017, Singapore
Building upon our highly successful European Congress and in response to market demand,
we are pleased to announce our first Asia Congress on successfully negotiating and
renegotiating Long Term Gas Supply Contracts.
We currently have an early-bird offer. Book early and save $500.
Get in touch with [email protected] to find out more or visit www.c5online.com/GasAsia
Monday, 27th February 2017
8.00
Registration and Coffee
9.00
Opening Remarks from the Chair
9.15
Assessing the Future of Long Term Gas
Contracts (LTC) in Asia: The Golden
Age of Gas?
Historically LTC’s have been essential for
suppliers in order to underpin investment and
cash flow. In addition, buyers want security of
supply and pricing stability. However, with
pricing trends increasingly challenging to
predict, flexibility in contract terms are now
being increasingly sought by purchasers.
* Gazprom speaker - TBC
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Is there a need for Long Term
Contracts to ensure that multimillion
dollar investments can be carried out
and can be justified?
Is it possible to guarantee the
profitability of these investments if
they are not structured in the long
term?
What are the financial constraints to
producing LNG without having agreed
on a LTC?
What are the current trends for
existing contracts? How the lack of a
harmonised regulation for the Asian
market is impacting upon LTC
How the Asian market will develop for
buyers and the sellers to be able to
Draft Subject to change
Contact Daniela Kaltenbach – [email protected] - +44 (0)20 7878 6954
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negotiate price bearing in mind that
there is an inherent uncertainly on
both sides?
Can increased flexibility make LTC
attractive again?
o What is the need for such
flexibility?
o How can this be achieved?
(e.g. Under what contractual
scheme?)
How the lack of numerous sources of
supply in the Asian market is impacting
upon LTC?
Forecast for the next 1-3 years
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11.45 Making the Transition from Oil
Indexed to Hub Pricing: Lessons
Learnt from Europe
Madjid Kübler, Managing Director, Team
Consult GPE GmbH
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10.15 Morning Refreshments
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10.45 Evaluating Current Contract Trends in
Asia: How Sustainable is the
Momentum towards Shorter term
agreements?
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Chikako Ishiguro, Senior Analyst, Osaka Gas
Co., Ltd. – provisionally confirmed
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Tomas Haug, Associate Director, NERA
Economic Consulting
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Bastian Gottschling, Principal, NERA
Economic Consulting
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Is there a tendency of increasing some
short term gas supply contracts?
- If so, how are they being
negotiated from the
beginning?
How is price volatility affecting
contract terms?
Is the tendency to re-negotiate to
shorter contracts temporary due to
the sharp drop in oil prices?
- If so, how long is this going to
last for?
What is the new dynamic of supply
contracts in the short term and how is
it working?
How to use shorter term contracts as a
risk management tool
How is the combination of long term
and short term agreements working?
What will happen after 2020?
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What is the future for Oil indexed
contracts in Asia?
What should the price be linked to
now?
How is the Increasing reference to spot
affecting LTC’s and STC’s?
Reference to the US Henry Hub:
How this will affect the
market 10 years from now?
Developments in Singapore LNG
pricing – can you create volume in Asia
at hub price so you have more of a spot
market?
Will contracts be indexed to other
references, such as the emerging
Singapore hub price or the JCC?
How are hybrid contracts, partly linked
to oil, functioning in Asia?
Is there a hybrid contractual formula
to reduce costs?
12.30 Networking lunch
14.00
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Lifting the Lid on Price Revision and
Re-Opener Clauses
What in reality is the ability of parties
to re-open price?
What are the price re-opening
mechanisms for existing contracts that
are currently enforced?
What the optimum pricing mechanism
should be
Price re-adjustment clause - how do
you calculate the new price?
Sophistication of the gas price review
models which allows you to renegotiate the price in a flexible way
depending on the country
How to identify and build a different
pricing system depending on where
Draft Subject to change
Contact Daniela Kaltenbach – [email protected] - +44 (0)20 7878 6954
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and what the natural gas is going to be
used for
How to negotiate a lower price and
differentiated price structure i.e. new
indexation that reflects the value of
LNG instead of the value of oil
How to resolve the expectation gap
between sellers and buyers arising
from the mutually acceptable price via
negotiation
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15.00 Afternoon Refreshments
15:30 Ensuring Gas Supply Contracts Are Fit
for Purpose to Avoid Re-Negotiations
or Disputes
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Contract flexibility:
o What is the market trend for
Diversion
rights
and
Destination clauses?
How the “Take or pay” clause is
mutating and becoming more flexible
What are the difficulties arising from
“Ship or pay” clauses?
How to determine in what
circumstances a Hardship clause
applies
Jurisdiction clause: what to do when
there is a disconnection between what
the tribunal says and what the party
wants?
Price clauses associated with indexers:
Brent or Henry Hub
o What happens when the
indexer suffers very abrupt
changes?
o How does this affect the renegotiation of a contract?
Issues arising from Clauses of origin
and incapability of delivering gas:
power supply
o Contracts attached to a supply
source – what happens if that
source of supply is affected by
Force Majeure?
o Can the supplier invoke Force
Majeure and be unhooked to
deliver?
o Can depletion of gas reserves
in that source be invoked as
Force Majeure?
Evolution of the way price review
clauses have been drafted:
o Issues due to lack of accuracy
in the past
o Difficulty of interpreting what
is an acceptable price when
the parties did not detail that
in the past
o Unpredictability of formal
arbitration proceddings due to
different mentality and lack of
precedents
16.30 Gas vs Alternative Energy Sources
and their Impact on Long Term
Contracts
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How the sharp fall in Brent and
consequently gas price has made gas
less competitive and what are the
implications for negotiations of LTC’s?
Is there coal to gas fuel switching?
How is this affecting LTC negotiations?
What is the impact of renewables
affecting LTC: solar, hydropower and
wind energy sources?
Nuclear energy – The Japanese case:
how they switched to gas after the
Fukushima accident
17:15 Chair’s Closing Remarks and
Conference Adjourns
17.30 Networking Drinks Reception
Draft Subject to change
Contact Daniela Kaltenbach – [email protected] - +44 (0)20 7878 6954
Tuesday, 28th February 2017
8.30
Morning Coffee
9.00
Opening Remarks from the Chair
9.15
Gas Price Disputes: Lessons Learnt
from Europe
Drawing upon the experience of high profile
European gas pricing disputes, this session
will provide practical examples of lessons
learnt from the various parties.
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Mark Levy, Partner, Allen & Overy –
provisionally confirmed
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Best practices from negotiators in the
US and Europe who have been
involved in price reviews
Taking advantage of how contracts
have been interpreted in Europe
Will arbitration continue as the
preferred means of resolving these
disputes?
o Will the preferences move
between ICC with an office in
NY or London and the London
Court
of
International
Arbitration?
Lessons learnt from the rich
jurisprudence of gas price mechanisms
in Europe
10.15 How to Successfully Carry out a
Negotiation Behind Closed Doors Best Practices to Avoid Arbitration
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Understanding how the increase of
supply is going to affect negotiations?
How to overcome issues about
contract renewal
Defining the biggest issues to
negotiate contracts in order to avoid
making the same mistakes in the
future:
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Contract structure and differences
with Europe: LNG contracts and
transport logistics implications
- Overcoming the lack of revision
clauses: how to look for other legal
inroads to open up for discussion
- Cultural issues and economical
pressure
- Comparing different strategies to
negotiate in Europe and in Asia
How to carry out an effective risk
analysis to see whether it makes more
sense to have an efficient breach or
not
How changes in the market context
affect contract negotiations?
Understanding and re-negotiating
contractual terms 10 years later when
you haven’t negotiated that contract
Best practices to re- negotiate a price
in the contract that is much higher
than spot prices
Has demand caught up with supply?
How to negotiate a lower amount than
the contract allows for?
What are the trends for existing
contracts that are currently enforced?
11.00 Morning Refreshments
11.30 What are the Pre-Arbitration
Mechanisms that have to be Complied
with?
Moderator: Christopher Boog, Partner and
Vice-Chair International Arbitration
Group, Schellenberg Wittmer
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The extent to which pre-contractual
mechanisms are binding on parties
What sanctions can be applied in the
event that they are not complied with?
What triggers a gas price review?
What
are
the
issues
and
responsibilities when you are dealing
Draft Subject to change
Contact Daniela Kaltenbach – [email protected] - +44 (0)20 7878 6954
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with high volumes (no one wants to
assume responsibilities)
Risk Assessment on the advantages of
having the dispute resolved by an
independent third party vs continuing
with the negotiations?
What is the experience now of the
companies who have invested time
and resources on arbitration? Are
there better ways to reset these
contracts?
Preparing for arbitration: who should
the arbitrators be? What should the
arbitral body be?
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12.15 Be Ready for a Price Dispute When It
Arrives
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Will we see a wave of disputes in Asia
as we have seen in Europe?
Angles when resolving disputes:
- Is Asia different from Europe
when resolving disputes?
- Is there a harmonious way to deal
with the disputes?
What the options and the
availabilities are in terms of the
applicable law?
How do the dispute resolution
mechanisms that you have in these
contracts, eventually end up in
arbitration?
How to successfully structure the
procedure to make it more flexible
Problems to enforce awards
depending on the jurisdiction
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15.00 Comparing and Contrasting the Sale
of LNG in Asia: traditional buyers
(Japan & Korea) vs buyers (Thailand
and India)
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13.00 Networking lunch
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Thematic overview section: current
landscape, specific practises and procedures,
contracts & potential of price reviews
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14.15 Suppliers’ Countries Perspective:
USA, Australia and the Middle East
Influence of the US when negotiating
contracts as a new player in the LNG
market
- Buying
with gas on gas
competition
- Price of US Gas, the Henry Hub
and the impacts of the
volatility in the following 2-5
years
- What will happen when US
LNG prices arrive in Asia?
 With Asian prices
being cheaper, what
happens to the new
contracts to be signed
with the US?
 Can they choose not
to lift the volumes?
 What if over the long
term the buyers can
no longer bear their
offers?
 Would that open the
negotiations again?
How the volumes of Australia are
influencing LTC?
Negotiating with Qatar: Europe vs Asia
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Understanding the dynamics of
negotiating with various participants
Impact on the negotiation of LTC of the
relationship basis and the way in which
people approach contracts
Differences you can expect from an
arbitration award depending on the
jurisdiction
Differences in the wording of a
contract depending on the jurisdiction
Nearly all of these contracts are under
English law, but how will a
Japanese/Thai arbitration approach
English law?
Japan:
Draft Subject to change
Contact Daniela Kaltenbach – [email protected] - +44 (0)20 7878 6954
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The Formula: The figure of the
constant as a factor of
disagreement:
- Trying to find a value for the
constant
- What are the trends for the
future?
How are the negotiations going to
change due to the fact that the
two major purchasers in Japan
have signed up together and they
are now the world’s largest LNG
buyer? Are they going to flex the
amount they buy?
Implications of the recent
liberalization of the LNG market in
Japan:
- Will the downstream market
impact on how pricing is done
for upstream?
Implications of their reliance on
gas due to termination of a nuclear
programme and the impact on
negotiations
the price agreed in the former contract. In
addition to this, Rasgas waived a take or pay
penalty for the value of $1 b.
17.15 The Future of Long Term Contracts in
China
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15.45 Afternoon Refreshments
16.10 Examining Singapore as a Possible
Future Hub for LNG in Asia
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Unique position of Singapore:
Singaporean Courts approach to
dispute resolution procedures
 Is Henry Hub going to be a component
of the Singapore pricing?
16.45 Case study: A Landmark Negotiation:
Petronet Vs RasGas
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A comparison of pipeline gas contracts
vs LNG
- Why would you build a
pipeline?
- Deliver it at the border and
you still have several thousand
of Kms to cross to get it to the
user
Natural gas production in China vs.
coal production and environmental
problems
- Impact
of
Government
restriction
on
new
construction of coal power
plants Sources of natural gas :
Siberia, future development
buying for Russia, Kazakhstan,
Turkmenistan and Myanmar
through pipelines.
- LNG re-gasification facilities
and
their cost and renegotiated
purchase
agreements with several
groups: Papua New Guinea,
Australia, Qatar, Indonesia
Onshore
pipeline
developments
between Russia and China
17.45 Chair’s Closing Remarks & End of
Congress
A successful price negotiation case whereby
the price for the buyer was reduced to half of
Draft Subject to change
Contact Daniela Kaltenbach – [email protected] - +44 (0)20 7878 6954