Journal Article

The essential evolution of LNG trading—moving to GTCs

Ruchdi Maalouf

in The Journal of World Energy Law & Business

Volume 11, issue 5, pages 410-426
Published in print October 2018 | ISSN: 1754-9957
Published online September 2018 | e-ISSN: 1754-9965 | DOI: https://dx.doi.org/10.1093/jwelb/jwy022
The essential evolution of LNG trading—moving to GTCs

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Abstract

On 12 June 2018, French law firm De Gaulle Fleurance & Associés released a set of proposed general terms and conditions (GTCs) to be used for the sale and purchase of liquefied natural gas (LNG), the LNG GTCs 2018.1 The GTCs, which were developed with input from several LNG experts (including lawyers, traders and surveyors), in order to deliver a set of market ready terms and conditions, offer a credible alternative to the customary route of using the master LNG sales and purchases agreement (MSPA) to trade LNG cargoes which will give greater impetus to growing the short-term LNG trade sector. The GTCs, which recognize that the current contracting methodology of using MSPAs is burdensome, inefficient and obstructive to liquidity, efficiency and tradability, follow an attempt to develop a proof-of-concept over 6 years ago.2 In moving from the academic to the practical, the GTCs have been drafted and made publicly available in order to demonstrate that using GTCs for promoting the growth of short-term LNG trading is more than a theoretically desirable development.

Journal Article.  9438 words.  Illustrated.

Subjects: Environment and Energy Law

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