Negotiating Price Review Clauses and Handling Disputes in Long-Term Energy Contracts

Marketplace Trends, Trigger, Adjusted Price Procedure and Application, Termination Rights

This program has been cancelled

A live 90-minute CLE webinar with interactive Q&A


Wednesday, September 5, 2018

1:00pm-2:30pm EDT, 10:00am-11:30am PDT


This CLE webinar will guide energy counsel on price review clauses in long-term energy contracts. The panel will discuss the key considerations when negotiating and drafting price review clauses, as well as tips for handling disputes related to price review.

Description

Many gas and liquified natural gas (LNG) supply contracts have 15- or 20-year terms. Because these contracts are typically signed to monetize stranded gas reserves, and the contract price is often indexed to the cost of crude oil (and thus subject to unanticipated market changes), parties typically use price-adjustment mechanisms as a means to protect against market shifts. Failing to address these issues in contract formation can have detrimental effects.

As the U.S. shifts to LNG exporting, and U.S. companies seek to sell LNG globally, they must understand marketplace trends as well as the complexity of price review clauses. Elements to be considered should include a trigger, negotiation procedure, criteria for pricing, and accounting adjustments.

Further, explicit provisions for the resolution of pricing disputes should be included. The classic approach is an arbitration clause, although one emerging approach is to add a termination right exercisable by either party absent an agreement on price following good-faith price review negotiations.

Listen as our authoritative panel discusses critical considerations and factors that counsel should weigh when negotiating and drafting price review clauses. The panel will also address ways to handle disputes related to price review.

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Outline

  1. Background on price review clauses
    1. Trigger requirements
    2. Procedure for negotiating and adjusting the price
    3. Application of adjusted price under the contract
    4. Factors to consider when adjusting price
  2. Marketplace trends (price review disputes)
    1. Recent price review disputes
    2. Price review dispute strategies
  3. Marketplace trends (LNG sales contracts)
    1. Developments in LNG pricing and destination flexibility
    2. How these developments may affect the negotiation of price review clauses

Benefits

The panel will review these and other crucial issues:

  • What are the critical factors to consider when negotiating price review clauses in long-term energy contracts?
  • What are the principal issues to consider when structuring price review clauses?
  • What issues frequently arise when implementing price review—and what strategies work to resolve disputes?

Faculty

Coriell, Wade
Wade M. Coriell

Partner
King & Spalding

Mr. Coriell focuses on complex, international commercial and investment disputes. He has particular strength in...  |  Read More

Goncalves, Christopher
Christopher J. Goncalves

Managing Director
Berkeley Research Group

Mr. Goncalves provides energy industry and quantum expert analysis for international energy arbitration and litigation...  |  Read More

Nelson, Richard
Richard Nelson

Partner
King & Spalding

Mr. Nelson regularly advises international oil and gas companies, host governments, project developers and sponsors in...  |  Read More

Rogers, Daniel
Daniel R. (Dan) Rogers

Partner
King & Spalding

Mr. Rogers specializes in energy-related infrastructure development and finance, as well as energy-related commodities...  |  Read More

Silbert, Elizabeth
Elizabeth Silbert

Partner
King & Spalding

Ms. Silbert works with clients at every stage of arbitration, from strategic advice on drafting arbitration agreements...  |  Read More