Gas & LNG Contracts and Negotiation

Course review:

About this World Class Training Course
The 21st Century has been dubbed the “Gas Century” because of the future dominance of gas in future energy
expansion. This course starts with concise teaching sessions which explain how natural gas and LNG have come to
be so important, and how these businesses work – these sessions will equip you with fundamental knowledge of
what really matters in these big negotiations. Then through your participation in our new and highly realistic
negotiation exercise, you will learn how to succeed in negotiating gas and LNG deals.
The course is intended to be a very practical aid to help attendees to understand how major gas and LNG
negotiations work, what the key terms mean and how to conclude deals by negotiating these key terms in a
realistic negotiation exercise. It targets participants who may be unfamiliar with commercial gas/LNG contracts
and negotiations but who nevertheless may be asked by their companies to participate, and it seeks only to
provide sufficient information on typical gas & LNG terms and conditions as is necessary to enable participants to
engage knowingly in an actual negotiation and to understand the processes involved.
The Negotiation Game Module
The practical highlight of the course is a completely new, major, gas and LNG sale and purchase negotiation based
on a realistic project. The negotiation involves a politically adept government, multinational and private oil
companies, an NOC, the host country regulator, financial institutions and gas buyers, many with conflicting (and
shifting) agendas. The course participants are formed into negotiating teams representing each party and detailed
advisory notes (Adnotes) are presented which represent realistic market and political developments. Regular
dialogue will occur between each team and the course moderators. The negotiation exercise reflects key points
taught in the teaching sessions taken from several real life case studies from the course leader’s personal
experience. Participants will be set success criteria and be accountable for explaining their approach and the
extent to which they achieved the criteria in presentations following the final negotiation sessions.
Key Learning Points from this Course includes the following:
 Where gas and LNG contracts “sit” in the oil and gas industry, what gas and LNG contract terms all mean, and
the differences between similar terms in pipeline gas and LNG contracts
 Why any major gas or LNG agreement must be a balance of risk and reward, and identification of current
market risks and possible structural changes
- Describing how and why an actual major deal went very wrong
- Worked examples describing five commonly used quantitative investment evaluation methods, plus two
key qualitative project evaluation methods
- Worked examples describing price calculation
- Explanation of current methods for accommodating fluctuating oil prices and market competition over
long periods
 Key risk identification – competing fuels, how “value” must be affordable in host markets, how key contract
“re-openers” can help parties negotiate through tough economic times, major non-economic risk forecasting
and risk management
 Project feasibility. Negotiation practice and behaviour – why it is essential to-:
- determine in advance if a potential agreement is possible or impossible;
- know/ calculate/make an informed judgement as to what the counterparty wants/needs;
- know what we want, what we can concede and the valuation of concessions by both sides;
- learn useful tips from other countries (Asia prices LNG differently from Europe or the US, for example)
- understand the world outside the gas/LNG contract
 Real world appetite for long, medium and short term pipeline gas and LNG contracts, role of trading,
incorporating contract optionality and the impact of globalization
 Real life examples will be given from the wide personal experience of the course leaders. Learning point
summaries will help the attendees grasp key structures