Part 1
There are currently substantial commercial incentives for Asian
buyers to seek price adjustments under their long-term LNG
contracts. But whether an adjustment can be achieved at all, and if
so the process and the outcome are likely to be dependant on the
terms of each price review clause. It is therefore critical that
the operation of these clauses is well understood.
We outline below the three main elements typically found in
price review clauses.
1. The trigger
Typically, there is one or more specified ‘trigger’
that the requesting party must show has been satisfied.
Frequently this may be the passing of a period of time: for
example, a first review might occur after a set number of years
from the date of the first delivery under the contract, and
subsequent reviews at stated intervals thereafter (for example,
every four or five years). Since a party will have to wait a fixed
number of years before it may trigger the clause, this limits the
number
