Asia is a focal point of the world LNG industry. It is home to many of the biggest LNG exporting countries and the world’s biggest LNG buyers (based in Japan, China and Korea). The vast majority of the LNG trade worldwide takes place under long-term contracts. A critical part of most of those contracts is the opportunity to revisit the price formula at regular intervals to bring it back in line with the market. Those price reviews are at the intersection of law and economics. They are an agreed process under the contract and thus legal. However, their outcome usually depends on demonstrating that from an economic perspective, a change to the contract’s price formula is justified (under the agreed test). Crucially, it always depends on the application of the specified criteria. Those criteria are never mechanical, and their application involves expert economic judgment.

This workshop focuses on the practice of LNG price reviews in Asia. It will take participants through the full life-cycle of Asian LNG price reviews, from the drafting of clauses through to the ultimate resolution of price reviews by arbitration if the parties cannot agree on the new price formula.