Enforceability of Take-or-Pay Provision in Offtake Agreements Post Cavendish
Article from: OGEL 4 (2017), in Liquefied Natural Gas (LNG)
Executive Summary
[Addendum April 2018] In the capital-intensive business of liquefied natural gas ("LNG"), developers of greenfield LNG projects seek participation of consortia of lenders to provide debt financing. To enhance bankability of such projects, and to mitigate their revenue risk, LNG project developers seek customers who commit to paying the developer for a minimum quantity of LNG annually for a fixed term. Such payment needs to be mandatory in order to fulfil the basic purpose of the agreement - providing visibility over the project's income stream so as to assure lenders of the ...