Case studies

Sourcing LNG for a small country importing gas for the first time

Bill developed a competitive procurement process for a newly-formed national gas company in a small country. Early on in the process the buyer’s key needs were identified. These included the need for any supplier to accept the buyer’s nomination of a start date for the supply to meet the construction of a new import terminal and associated downstream infrastructure, that the buyer needed volume flexibility as a result of variable demands, and that the county’s alternative fuels were oil products and that LNG supply must show a cost reduction against these.

Working with the client, he identified a number of potential suppliers who could meet these requirements and proposed to the board of the company how these might be met contractually.

In a series of meetings with potential suppliers he gave a short presentation covering the import project and proposed a term sheet to the suppliers to commence initial contract negotiations. Over a period of weeks, and working with legal advisers, the term sheet was developed into Heads-of-Terms and suppliers gave initial price bids against a pricing formula agreed with the client at Bill’s recommendation.

Several suppliers were short listed and the Heads-of-Terms developed into a longer document which would form the basis of a full supply contract. A preferred supplier was chosen on the basis of a final round of price bids against the detailed Heads-of-Terms.

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