UK BP Publishes its LNG DES Contract Terms
UK major BP has become the first major oil and gas business to publish its LNG master sale and purchase agreement template for delivered ex-ship contracts (DES LNG MSA), it said April 1. The contract allows either party to buy or sell physical LNG at a fixed delivery point as the trend is towards free destination points that make the market more competitive.
"As BP operates an established LNG portfolio, both buying and selling LNG, the BP DES LNG MSA has been developed over many years to be balanced and fair between buyers and sellers. BP expects that its publication will contribute to the broader discussion around standardisation and liquidity for LNG transactions," it said.
Standard terms and conditions will cut with the time and money spent negotiating bespoke terms each time and this is seen as a way to simplify trade and so increase liquidity, especially as new entrants join the market.
BP's head of LNG for BP Supply and Trading Jonathan Shepard commented: “We’re publishing the BP DES LNG MSA to promote efficiency in the rapidly growing global LNG industry by disclosing our standard LNG trading terms. We believe that being open and transparent in the way we do business is the best way to engage effectively with new and existing LNG partners.”
The announcement coincides with the start of a major LNG conference in Shanghai.