Navigating LNG Price Arbitrations

The global energy sector is changing significantly as liquefied natural gas (LNG) becomes increasingly important in meeting growing energy demands and addressing environmental concerns. Even before COVID-19, the natural gas markets underwent such rapid evolution that they disrupted established long-term supply contracts, leading to waves of LNG price arbitrations. While LNG price arbitrations may harbour uncertainties, arbitration continues to stand as the preferred method for resolving disputes. Parties can play a role in minimising uncertainty in LNG price arbitrations, primarily through careful contract drafting. This note dives into LNG price arbitrations, highlighting their background, the challenges they involve, and practical ways to mitigate against uncertainty in this ever-changing environment.