Force Majeure Standoffs Expose Flaws in Long-Term LNG Deals

摘要

A number of Asian LNG buyers were quick to press the panic button after coronavirus hit downstream gas demand earlier this year,scrambling to issue force majeure(FM) notices.Others hung back.The varied responses underscore just how contentious the issue is,and expose the inadequacies of long-term LNG sales and purchase agreements(SPAs) in helping buyers deal with pandemics such as Covid-19.Given the limited tools at buyers’disposal to mitigate exposure to contract liabilities,pressure is growing to ensure new contracts contain more flexible provisions and even termination clauses.