Getting closer to the Asian energy markets
Since 2008, Singapore International Energy Week (SIEW) has been an annual platform that brings together people from across the energy sector. It allows energy professionals, policymakers and commentators to discuss and share best practices and solutions. The gathering promotes the exchange of ideas and discussions about energy-related issues. It also allows the opportunity for networking and deal making, and provides a platform to showcase innovative products and solutions in the energy marketplace.
I was keen to hear from other delegates and learn the latest insights into the market. I saw this as a fantastic chance to network and compare notes with energy companies and other delegates, as well as using this platform for us to showcase our research, analysis and insights.
The future of LNG in Asia
I took part in a panel discussion with Ashurst Law on developing LNG to power projects in South East Asia. The workshop looked at the various legal entities and agreements that need to be in place to minimise risk as projects move towards development. Some of the risks that were highlighted included completion risk, counterparty risk and market risk. The panel confirmed that risks need to be passed on to the entity that is best positioned to mitigate and contain that risk. This is why project structure is so important.
Changing buyer requirements
The panel also led discussions on a market overview of South East Asia, contracting trends (including destination clauses) and the movement towards shorter-term LNG contracts. Undoubtedly, buyer requirements are changing. Overlaid with the prospect of gas market liberalisation and declining prices, participants asked if arbitration would become a tool for Asian buyers to resolve their overcontracted positions. Although this has yet to materialise, buyers would definitely be reviewing their contractual terms and more bilateral discussions will be needed to perhaps avoid the lengthy process of arbitration.