LNG CONTRACTS

Gas & Power Series 3 day interactive training course LNG CONTRACTS Led by: Thomas E. Valentine, Partner, MACLEOD DIXON LLP ENERGY GROUP Dubai, UAE 20 - 22 April 2009 This course fully prepares you to join a negotiation by giving you a better understanding of the legal structures that govern the LNG industry and the contracts that bind the different players BY ATTENDING THIS COURSE YOU WILL: • Form a framework of the resource, market, financial, regulatory and operational principles behind LNG contracts • Understand the series of contract negotiations necessary to bring a project into fruition, namely: • Specific Upstream Agreements: Development and Fiscal, • Development and Production Sharing, Joint Ventures • Project Finance • LNG Sale and Purchase Agreement • Time Charter Party Agreement • EPC Contract • Terminal Use Agreement • Increase your ability to reach agreements across a wide range of issues • Overcome the difficulties that arise in negotiation by understanding all the processes and contracts For further information please contact Kimberly Adams on tel: +44 20 7978 0042 fax: +44 20 7978 0099 or email: kadams@thecwcgroup.com www.thecwcgroup.com LNG CONTRACTS APRIL 2009 Overview Gas contracts are high value business and a lot of money is made and lost on the commercial terms. Many projects slow down or fail because the gas contract chain, the contract terms and the negotiation process are not fully understood. Others go ahead but on unequal terms. Successful contracts need informed buyers, sellers and transporters. This intensive 3 day course provides a detailed review of the most commonly used gas contracts, from types of country contracts to terminal use agreements. Participants will gain a thorough and practical understanding of how contracts work throughout the LNG chain. LNG CONTRACTS APRIL 2009 Course location Traders Hotel, Dubai Corner of Abu Baker AL Siddique and Salah Al Din Road, Deira, Dubai, UAE Tel: +971 4 265 9888 Fax: +971 4 265 9777 Course materials Each delegate will be provided with a set of comprehensive documentation supporting the three days with notes and slides. This documentation will be provided on both paper and CD format. Who should attend All professionals involved in LNG, be it purchase, transportation or sales, who wish to gain an effective understanding of the main aspects of contracts from a legal perspective. This includes: ■ ■ ■ ■ ■ ■ ■ Legal counsels & lawyers Negotiators & commercial managers Business development managers Executives from power generating companies Executives from distributing companies Executives from industrial users Bankers Certificates/CPD points Personalised certificates will be awarded to participants who successfully complete the program. CWC School for Energy is a member of the CPD Continuing Personal/ Professional Development Certification Service and the LNG Contracts course has been independently certified. All participants will also receive a declaration of attendance of a certified CPD course. paper and CD format. Format The course leader will use a lecture format and interaction, questions and discussion will be encouraged. Participants will benefit from each other’s expertise and global outlook. The atmosphere will be informal, the participant numbers limited and no press will be allowed. 21 CPD HOURS Continuing Legal Education Credits Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE to the amount of 21 credit hours. We will provide you with the form to apply for MCLE hours. “Very informative with up-to-date information on evolving trends in the LNG Industry. Absolutely necessary to update skills.” Eromosele Inegbedion, Legal Counsel, NIGERIA LNG LTD LNG Contracts July 2008 21 MCLE HOURS In-house training This course can be presented exclusively for your organisation on an in-house basis, tailored to meet your specific needs. To discuss how we can work with you to meet your training requirements please contact: Patricia Borges, Director Tel: + 44 20 7978 0044 Email: pborges@thecwcgroup.com LNG Contracts April 2008 Dubai About your course leader… THOMAS E. VALENTINE practices in the area of energy law with 20 years of experience in the oil and gas industry, both as a barrister and as a solicitor. In addition to being a Partner with Macleod Dixon LLP Tom has also served as Senior Counsel (Projects) with Qatar Petroleum, the national oil and gas company for the State of Qatar. While in Doha Tom was involved in the QatarGas II Project for the sale of LNG into the United Kingdom, the RasGas (Train 3) Project for the sale of LNG into India, and the Endesa Generacion Project for the sale of LNG into Spain. Tom continues to be involved as legal counsel and advisor to LNG projects around the world including current projects in the Middle East, Canada, the United States, West Africa and South America. Tom speaks and lectures on LNG and LNG contracting issues on a regular basis and has appeared at seminars and workshops across Canada and the United States, as well as in China, South America, West Africa and the Caribbean. In addition to LNG projects, Tom’s conventional oil and gas work involves projects in the Middle East, the CIS, South America and Africa. Tom obtained his B.A. from the University of British Columbia in 1983, his LL.B. from Dalhousie University in 1986, and his LL.M. from the London School of Economics in 1989. He received the Mabrouk Award from Qatar Petroleum in 2003 and is rated by Martindale & Hubbell’s Legal Counsel Rating System as “Very High to Pre-eminent”. He received the R.P. Bamford Award for Academics from Dalhousie University, and the Award of Excellence from the Canadian Petroleum Law Foundation. Tom also lectures at CWC School for Energy’s successful “LNG - Understanding the Strategic, Commercial and Legal Fundamentals” training course. LNG CONTRACTS APRIL 2009 INTRODUCTION TO COURSE OBJECTIVES HOST COUNTRY ISSUES HISTORY OF THE LNG INDUSTRY ■ ■ ■ ■ ■ History Why LNG makes sense When LNG makes sense Market Examination - Sellers Market Examination - Buyers HOST COUNTRY RISK ASSESSMENT ■ Geological Risks • Reserve Quantity • Reserve Quality ■ Political Risks ■ Legal Assessment • Constitution • Petroleum Laws & Regulations • Host Government Contracts PROJECT ISSUES - LEGAL & COMMERCIAL ■ Legal Considerations • Are Legislative Guarantees Available? • Non Discrimination Undertakings − from the State − from the State Oil Company • Stabilisation of Rights • Expropriation & Nationalisation Risks • Sovereign Immunity • Legal Entities for Participants ■ Commercial Considerations • Project Structure • Contributions of the State • Contributions of the Participants • Term ■ Joint Legal & Commercial Considerations • Fiscal Terms − Royalties − Taxes − Customs Import of Materials &Equipment − Currency Controls • Right to Access Substances • Rights of Expansion ■ Additional Considerations • Environmental Impact Assessment • Wastes & Emissions • Local Resources (Water & Power) • Port & Harbour • Services - Local Preferences • Labour − Local Preferences − Local Training − Ex-pats Thomas Valentine conducting a course exercise, Dubai April 2008 “Rich in experience; gives excellent feedback and elaborates on the main legal problems very well.”* Marko Denadic, LNG Lawyer, OMV LNG Contracts April 2008 * Referring to course Leader Thomas Valentine Course dinner at LNG Contracts, Dubai April 2008 LNG CONTRACTS APRIL 2009 TYPES OF HOST GOVERNMENT CONTRACTS ■ ■ ■ ■ Concession Agreement (Tax & Royalty Agreement) Production Sharing Contract Risk Service Contract Hybrid Arrangements LNG CONTRACTS APRIL 2009 PROJECT FINANCE THE INFORMATION MEMORANDUM ■ Key Issues • Parties • Project & Purpose • Amounts • Interest Terms & Islamic Financing • Security • Conditions Precedent • Participants’ Arrangements − Equity Contributions − Completion Risks − Cost Overrun Arrangements • Drawdown Terms • Repayment & Prepayment • Events of Default ■ Additional Issues • Choice of Law • Major Covenants • Commitment Fee • Project Sponsors & Guarantees of Performance • Environmental Risk • Political Risk SPECIFIC ISSUES IN HOST GOVERNMENT CONTRACTS Grant of Rights The Contract Area & Rights of Expansion Exclusivity of Operations Restrictions on Rights of Operations Performance Standards by Operator Ownership of Reserves Supervision of Operations Relationship of the Parties Duration (Term) • Fixed Terms • Variable Terms • Extensions • Termination Rights ■ Relinquishment ■ Decommissioning Obligations ■ ■ ■ ■ ■ ■ ■ ■ ■ SPECIFIC UPSTREAM AGREEMENTS THE EXPLORATION & PRODUCTION SHARING AGREEMENT (“EPSA”) ■ ■ ■ ■ ■ ■ ■ Introduction & Purpose A Different Theory of Ownership The Concept of Relinquishment Obligations of the State The Concept of Profit Oil The Concept of Cost Oil An Examination of the Agreement THE COMMITMENT LETTER CREDIT AGREEMENTS ■ The Loan Commitment • Revolving Credit • Term Loans ■ Source of Funds • Participants • Debt • Bonds • Export Credit Agencies − Buyer Credits − Supplier Credits THE DEVELOPMENT & FISCAL AGREEMENT (“DFA”) ■ Introduction & Purpose ■ Specific Language Examined • The Grant of Rights • The Question of Authority • Development Issues • Royalties & Taxes • Services & Materials ■ Other Matters of Note ■ An Examination of an Outline THE LNG SALE & PURCHASE AGREEMENT ■ Introduction & Purpose ■ Key Terms • Conditions Precedent • Quality Issues − Markets − Language − Off Spec LNG • Quantity Issues • Price & Price Review • Invoices & Payments ■ Diversion Issues ■ Measurements & Testing ■ Programming ■ Force Majeure ■ Short Term (“Spot Sales”) ■ Other Matters of Note ■ An Examination of an outline THE DEVELOPMENT & PRODUCTION SHARING AGREEMENT (“DPSA”) ■ Introduction & Purpose ■ Specific Language Examined • The Grant of Rights • Development Issues ■ Other Matters of Note ■ An Examination of an Outline THE JOINT VENTURE AGREEMENT (“JVA”) ■ ■ ■ ■ ■ ■ ■ ■ Introduction & Purpose Objects of the Joint Venture Company Term of the Joint Venture Capital Contribution • Terms • Defaults Management of Joint Venture Company Marketing of Product Other Matters of Note An Examination of an Outline SIMULATION EXERCISE - NEGOTIATING A “SPA” SIMULATION EXERCISE - SELECTING THE MOST APPROPRIATE AGREEMENT LNG CONTRACTS APRIL 2009 SHIPPING SHIPPING ISSUES ■ Construction & Finance ■ Ownership & Operation LNG CONTRACTS APRIL 2009 The CWC Group is the foremost provider of training, conferences and exhibitions in the global LNG and gas industry. TIME CHARTER PARTY AGREEMENT ■ Introduction & Purpose ■ Description & Performance of Vessel ■ Specific Issues • Personnel & Duties • Operations • Maintenance ■ Laytime ■ Payment Terms ■ Demurrage ■ Insurance & Loss ■ Inspection Rights ■ Other Matters of Note ■ An Examination of an Outline CWC LNG EVENTS CWC has produced LNG events over the last 9 years, with our flagship events being our World LNG Summit and LNG Gala dinner held annually since 2000 in Europe and our North American LNG conference which is in it’s eighth year and has been held in New Orleans, San Antonio and Houston. We also have events in the Asia Pacific, South America and the Caribbean.. LNG Asia Next Generation, endorsed by the Energy Market Authority (EMA) and International Enterprise Singapore (IE), will be a global event looking at global contracts, financing, innovation and supply with a focused interest on Asia. This event will be held in July in Singapore. THE ENGINEERING, PROCUREMENT & CONSTRUCTION CONTRACT (“EPC”) Introduction & Purpose Special Conditions General Conditions Commercial Terms • Scope of Work • Rules of Work ■ FEED, Front End Engineering & Design ■ Testing & Performance ■ Liquidated Damages • Delay Liquidated Damages • Performance Liquidated Damages • Other Matters of Note ■ ■ ■ ■ CWC GAS EVENTS CWC has produced LNG events over the last 9 years, with our flagship events being the World LNG Summit in Europe and our New Orleans LNG conference in America. We also have events in the Asia Pacific, South America, Singapore and the Caribbean. LNG AND GAS EVENTS PRODUCED BY CWC INCLUDE: • • • • • • • • • • • • • World LNG Summit - held annually since 2000 LNG North America - held annually since 2002 Intergas, Egypt since 2005 Nigeria Oil and Gas - held annually since 2000 Gulf of Guinea Oil and Gas - held annually since 1998 Saudi Arabian International Gas Conference - held annually since 2004 Egypt Gas 2003-2005 GEPetrol and Oil and Gas in Equatorial Guinea 2003, 2005 Algeria Energy Week 2002, 2004 UK Gas Challenges 2003-2004 World GTL Summit - held annually since 2001 Gas Asia Pacific LNG 2004, 2007 Latin America and the Caribbean Gas Summit 2004, 2006 THE TERMINAL USE AGREEMENT (“TUA”) ■ Introduction & Purpose GENERAL TERMS & CONDITIONS ANNUAL CAPACITY CHARGE ■ Storage Capacity ■ LNG Specifications • General Issues • Off Spec Gas ■ Berthing & Unloading ■ Other Matters of Note ■ An Examination of an Outline LNG AND GAS COURSES PRODUCED BY CWC INCLUDE: • LNG - Understanding the Strategic, Commercial & Legal Fundamentals • LNG Contracts • LNG Markets & Short-term Opportunities • LNG & Gas Sale & Purchase Agreement & Risk Mitigation • LNG Supply Value Chain • Gas Marketing - Commercial, Economic & Contractual Imperatives • Gas Monetisation in Nigeria • GTL Fundamentals • LNG Project Financing • Gas Storage OTHER TYPES OF LEGAL AGREEMENTS CONFIDENTIALITY AGREEMENT STUDY & BID AGREEMENT PROJECT FEASIBILITY STUDY SAFETY CONCERNS MIDSTREAM AGREEMENTS ■ ■ ■ ■ ■ ■ ■ ■ ■ Crude Oil Lifting Agreement Crude Oil Transportation Agreement Gas Processing Agreement Gas Transportation Agreement Common Stream Operating Agreements Seismic Contract Drilling Contract Well Services Contract Master Services Agreement SERVICE AGREEMENTS “Simply brilliant. He effortlessly meandered through the voluminous course materials and effectively sustained participants’ interest along the way.”* Franklin Gogo Dienye, Senior Legal Counsel, Nigeria LNG Ltd LNG Contracts July 2008 * Referring to course leader Thomas Valentine REVIEW & QUESTIONS HOW TO BOOK LNG CONTRACTS Traders Hotel, Deira Dubai, UAE 20 - 22 April 2009 Telephone +44 20 7978 0042 to reserve your place Fax your completed form to +44 20 7978 0099 Email your details to us at bookings@thecwcgroup.com Post the completed form together with payment to: CWC School for Energy Limited Regent House, Oyster Wharf 16-18 Lombard Road London SW11 3RB, UK A B C D E F G H I J K L M N O P X R S T U V W X Y Z REGISTRATION FORM EARLY BIRD FEE: GBP £2,099 until 6th February 2009 GBP £300 discount Group bookings - A 10% discount is given for 3 or more delegates from the same company. www.thecwcgroup.com VENUE Traders Hotel, Dubai Corner of Abu Baker Al Siddique and Salah Al Din Road, Deira, Dubai, UAE Tel: +971 4 265 9888 Fax: +971 4 265 9777 REGISTRATION FEE: GBP £2,399 Your fee for the full four days includes documentation, morning coffees, lunches and refreshments. Mr/Mrs/Ms/Other (please specify) First names Last name Company Job title Tel (incl. country code) Mobile Email Address Postcode CONTACT FOR PAYMENT Name Tel (incl. country code) Email FULL PAYMENT IS DUE WITHIN 14 DAYS FROM DATE OF INVOICE AND BEFORE THE COURSE COMMENCES. DELEGATES WILL NOT BE ALLOWED ENTRY TO THE COURSE IF ANY PAYMENTS ARE OUTSTANDING. HOTEL INFORMATION Department Fax (incl. country code) Hotel information and travel costs are not included in the registration fee. We have negotiated preferential rates at the course venue. An accommodation booking form will be sent to you after you register for the course. It is the responsibility of the individual to arrange accommodation before the course commences. The rooms are subject to availability we recommend that you book your hotel in advance to avoid disappointment. Country BOOKING CONDITIONS Fax (incl. country code) Full payment is due within 14 days from date of invoice and before the course commences. Delegates will not be allowed entry to the course if any payments are outstanding. A confirmation letter and invoice will be sent to you on receipt of your booking. If you are unable to attend, a substitute delegate is always welcome. If you cancel your place more than one month before the event a £300 cancellation fee will be applicable. If you cancel your registration within one month of the event, or fail to attend the event then a 50% cancellation fee shall be applicable. Cancellation must be made in writing and will be acknowledged in writing. CWC has the right to cancel your place at any time. It may be necessary for reasons beyond the control of the organisers to alter the content, timings or venue. The Company will not accept liability for any transport disruption or individual transport delays and in such circumstances the normal cancellation restrictions apply. Cheque I enclose a cheque made payable to CWC School for Energy Limited for Please send cheques to CWC School for Energy Limited, Regent House, Oyster Wharf, 16-18 Lombard Road, London SW11 3RB, UK Bank Transfer Barclays Bank Plc. Account No: 30827061 Sort Code: 20-78-58 Swift: BARCGB22 IBAN: GB71 BARC 2078 5830 8270 61 All bank transfers must be marked clearly with the delegate name/invoice number Credit card Please debit my credit card (tick and complete details below) An additional 1.5% finance charge will be applicable on all credit card transactions DATA PROTECTION The personal information provided by you will be held on a database and may be shared with companies in the CWC Group. Sometimes your details may be made available to external companies for marketing purposes. If you do not wish your details to be used for this purpose, please write to Database Administration, Regent House, Oyster Wharf, 16-18 Lombard Road, London SW11 3RB, UK Name on card Card number Security code Expiry date Billing address Postcode Signature Country Today’s date REGISTERED OFFICE CWC School for Energy Limited, Regent House, Oyster Wharf, 16-18 Lombard Road, London SW11 3RB, UK CandD/PB/VJ/KA