UK Major BP Publishes FOB LNG Termsheet
UK major BP has become the first major oil and gas business to publish its free-on-board (FOB) master sale and purchase agreement template for LNG transactions, it said August 14. The document allows either party to buy or sell physical LNG cargoes on a free on-board basis, meaning that the buyer has to arrange transport, insurance, storage and any other requisites for handing the LNG from the point of delivery, typically the jetty at the liquefaction terminal.
BP said it has developed the FOB MSA to be "both a balanced and fair transaction route" for either side of the transaction and follows its earlier MSP agreement for delivery ex-ship.
Both publications are aimed at informing the broader discussion around standardisation and liquidity in LNG markets.
BP's head of LNG supply and trade Jonty Shepard said that the DES PSA "helped simplify industry processes. We hope the publication of the FOB MSA will build on that momentum as the LNG industry looks for opportunities to drive greater standardisation.”