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LNG Price Review

LNG price review for counsel and commercial leads: the price reopener clause split into what must be shown, and years of documents hung on it, for and against.

See the demo Book a demo

Follow counsel’s morning, 40 days before the window closes ↓

The problem

A once-in-five-years window, and the case buried in years of paper

The commercial team sees the formula price sitting above the market and raises it with legal before the window opens. Counsel issues a legal hold. IT exports mailboxes, finance pulls cargo and invoice records, the economist pulls licensed market data, and outside lawyers review documents in an e-discovery tool by keyword.

The economist builds the market case in spreadsheets, counsel drafts a chronology and a memo limb by limb in a word processor, and the ask is agreed by email. Nobody reads every email and meeting note for something your own side wrote about the procedure. A file built to argue tends to lose the awkward board paper, which the other side will find.

Built forCommercial leadsIn-house counselCommercial analystsMarket economists

The Problem Today

A price review turns on a few words in one clause, and the case for them is spread over years of documents.

$62.4M: a year at stake on half a point of slope, at $80 oil our estimate

Read by hand today

Emails
Amendments
Cargo files
Market data

Old emails can cut againstOne informal line can be put to a tribunal
Awkward papers get lostA file built to argue drops what it cannot answer

The Solution

Clause split into limbsThe things the clause asks to be shown, each with its own words
Each item on its limbFor or against, sized by how directly it speaks, with the passage
Conduct before counselEmails that touch the procedure, beside the clause, with no verdict
The clock beside the caseThe window counted down, and the cost of each later day worked out

Built-in controls

A second person checks each placement
Agents draw no legal conclusion
A person serves the notice; agents never send

What You Get

Counsel decides with the whole case in view, and finds the thin limb while there is time to work on it.

Each day countedThe window clock and the cost of each later day
A file counsel can hand onLimb by limb, against evidence and the privilege log
Doubts with an ownerEach question has a person and a clock

One clause, five limbs

LNG price review on one supply agreement, 40 days left in the window

A buyer takes three million tonnes a year under an oil-linked agreement. The formula sits above the market, the commercial lead has proposed a notice asking for half a point less slope, and lead counsel must decide whether it is served.

demoThe agreement, both companies, the people, the market series and every price are sample data. Clause wording is written for the example.

0108:50
Five limbs, 37 items, and $62.4M a year at stake on half a point
Lead counsel
The price reopener clause is drawn as a root with five limbs, each item hung on its limb for or against, sized by how directly it speaks. Limb 3, substantial and lasting, is the thinnest at net 2. Beside the map: the stake worked line by line, the window clock with its last day to send by email, and five conduct items waiting for counsel.
0208:55
Section 11.5 lit limb by limb, with what each must show
Lead counsel
Beside its limbs, the clause reads in full: a significant change, beyond either party’s control, substantial and lasting, price no longer reflects value, asked for as the procedure sets out. The reference point is the effective date, and what that measures is her own open question, Q-21. The agent reads the words; it never says what they mean in law.
0309:13
Keep this informal for now, says an email from the buyer’s own side
Lead counsel
The conduct watch read 14,100 emails, chats and meeting notes and set six before counsel, each beside the clause passage it touches, with no weight and no side. This one is from the buyer’s former commercial manager to the seller after a quarterly call. The procedure clause and the no-waiver clause sit next to it, and a strip shows when it was sent against the window.
0409:14
Counsel picks the limb and the weight, and asks who was on that call
Lead counsel
The agent set no weight. She chooses limb 5 and weight 3, direct, and opens a question to the commercial lead: who was on the call, and was anything proposed or agreed on price? Find both sides’ records. The question is due in three business days, and it counts against the limb until it is closed.
0509:14
Limb 5 thins from net 7 to net 4 while the question is open
Lead counsel
Back on the map, the email hangs on limb 5 as a conduct item in question, and the limb is drawn narrower. The side panel says the weight was set by counsel. The next step for her now reads four conduct items waiting. Nothing about the email is decided; it simply cannot be ignored while the notice is drafted.
0609:15
Hub index fell from 13.6% of oil before signing to 11.9% now
Lead counsel
Opening an item shows the source page with the passage lit: an internal market analysis by the economist. Beside it, why it bears on limb 1, how many documents it stands for, and who did what: proposed by the mapper at 94%, placed by the analyst, opened and checked by the economist. Counsel can put it in question from here.
07After the morning
Eight gates stand between the proposed notice and service
Lead counsel
The file assembles limb by limb from checked items and counsel’s rulings, with against evidence beside for and a privilege log. The largest action here is serving the notice: slope from 11.35% to 10.85%, proposed by the commercial lead, decided by counsel. Each gate shows its state, and several are still open, including the reference point and her own questions.

What half a point of slope is worth at $80 oil

Worked from the price formula in the agreement, every line open on the scenarios screen. The ask belongs to the commercial lead.

Formula price now0.1135 × $80.00 + $0.40, per MMBtu	$9.48
Formula price if revised0.1085 × $80.00 + $0.40	$9.08
Difference per MMBtu	$0.40
A year, on 156,000,000 MMBtu	$62,400,000
Each day the notice is later$62,400,000 ÷ 366	$170,492

estimatedOur estimate.

Around the case

The market, the price scenarios and the price reopener’s paper trail

Market, money, history and paper behind this one agreement.

Hub index as a share of oil by year against the reference point, and monthly with a run below 12.5%, each value from licensed feeds — **Market change, with its source**Hub price as a share of oil, year by year against the reference point, and month by month with ten months in a row below 12.5%. The economist owns it.

LNG contract price renegotiation scenarios: oil price, slope change and receipt date, the sum worked line by line, and which are checked — **Price scenarios**Oil price, change of slope and the day the notice is received, with the sum line by line. Only scenarios the economist checked go in the file.

Timeline of one LNG agreement from heads of agreement to today, with later papers, conduct emails, the legal hold and documents per year — **The agreement’s life so far**From heads of agreement to today, with the later papers, the conduct emails, the legal hold and documents a year under it.

Open questions on the price review, each with who asked, who answers, the item it gates and a due date, one overdue — **Questions with owners and clocks**Five open: the reference point, splitting deals like for like, a sales mix check, a board minute that is overdue, and the call.

Documents under the legal hold with search and filters, and set-aside lots signed by a lawyer or the commercial lead after a sample — **Documents under the legal hold**Every document is searchable. The ones set aside sit in lots that a person signs after opening a sample; three are still waiting.

Audit trail for the price review: legal hold, gathering, clause split, placements, checks, the proposed notice and counsel’s openings — **What each person opened**The hold, the gathering, the split, the placements and checks, the proposal, and each item counsel opened this morning, in order.

demoSample data, from the working solution.

Counsel decides, senior counsel countersigns, the commercial lead proposes

Whoever places an item never checks it.

Lead counsel

Sees: The map, the clause, conduct items and the gates
Signs: Rules on conduct and sets its weight; decides whether the notice is served

Senior counsel

Sees: What lead counsel read
Signs: Countersigns rulings and carried questions

Commercial lead

Sees: The stake, the window and the commercial evidence
Signs: Proposes the notice and the ask; serves it once decided

Commercial analyst

Sees: Agent proposals with their passages
Signs: Places items on the map; builds price scenarios

Market economist

Sees: Market series, deals and price sums
Signs: Checks market items and the sums

The agents

Seven agents build the case, and none says what the clause means

They read, gather, map, watch and sum. Counsel draws the conclusions.

Contract reader

Reads the agreement and papers and splits the clause into limbs.

Never says what a limb means in law

Record gatherer

Gathers documents under the hold, read only, and proposes privilege.

Never lowers a privilege label

Evidence mapper

Proposes limb, side and weight for each document, with the passage.

Never places an item
Never drops against evidence

Conduct watch

Reads correspondence and notes for conduct touching the procedure.

Never sets a weight or a side
Never calls anything a waiver

Market analyst

Builds series from licensed feeds, each value cited.

Never forecasts

Price calculator

Works the sums with each line open.

Never picks the ask

File assembler

Builds the file limb by limb, with the privilege log and index.

Never sends

What counsel and commercial leads ask about an LNG price review

What does LNG price review software do?

LNG price review software builds the evidence file for a price review under a long-term agreement. This solution splits the review clause into the limbs a party must show, hangs every document on its limb for or against, sets conduct emails before counsel, and counts down the window with the cost of each later day.

How does it read a price reopener clause?

The contract reader splits the clause into its limbs, each with the words that define it, and finds the reference point the clause compares against. What the words mean is a question for counsel, and the screen says so.

Is this an LNG price review arbitration tool?

It prepares the case before a notice is served, the stage where a file is cheapest to fix. The same map, with against evidence kept and every placement checked, is what counsel would hand on if the review goes further.

What about our own emails that might cut against us?

Conduct watch reads emails, chats and meeting notes for anything that touches the review procedure and sets each before counsel beside the clause. It gives no weight and no conclusion. Counsel decides the limb, the weight and what happens next.

Does it work for a gas price review clause outside LNG?

The work is the same: a clause with limbs, a reference point, a window and years of documents. The clause, limbs and windows are read from your own agreement.

Who serves the notice?

A person. The commercial lead proposes it, counsel decides after the gates are met, and the commercial lead serves it. Agents never send anything to the other party.

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