LNG deal structuring
Buy-side mandates for buyers who want to reach the producer directly and end up with regular shipments under a contract.
Only goods of non-sanctioned origin. Sanctions screening of all parties is mandatory.
The deal from the buyer’s side
An LNG buyer usually arrives with offers from intermediaries and a simple aim: to talk to the producer, not to the fifth link in a chain. We work on the buy side, on a retainer. We take the buyer’s position to the people at the seller who are responsible for supply before negotiations begin; the parties then negotiate the final terms themselves.
Producers work through their own forms and document packages. We request the package, fill in the seller’s forms for the client and submit them, so the file arrives complete and in the format the seller expects.
For the buyer’s bank, and for the authorities that look at the contract, the money flow and the corporate structure of the deal must leave no open questions. We build both before the first draft of the contract, so that the result is the one the buyer came for: regular shipments under a contract.
What we check at the seller
Who at the seller is responsible for supply, and whether the offer actually comes from them.
Registration, ownership and the signatory's authority: in open sources, then through the seller's bank with the seller's written authority to verify.
Sanctions screening of the seller, its owners and the vessels named in the deal.
The seller's document requirements and forms, so that the buyer's file is complete on first submission.
Any payment requested from the buyer before a contract exists. That ends the conversation.
Typical structure
Delivery basis
The delivery basis is agreed in the contract under Incoterms 2020.
Payment instrument
A documentary letter of credit or SBLC from the buyer's bank under UCP 600, built together with the money flow and the corporate structure of the deal so that the bank has no questions about the contract.
Inspection
Independent measurement of quantity and quality, with certificates that match the payment terms.
Document route, step by step
The buyer's position to the seller
Before negotiations start, the buyer's requirements reach the people responsible for supply at the seller.
The seller's package and forms
We request the seller's document package, complete its forms for the buyer and submit them.
Contract
The parties negotiate the final terms and sign the contract themselves. We prepare and check the drafts.
Payment instrument
The buyer's bank issues the letter of credit or SBLC. The seller checks it and provides performance security.
Cargo documents
For each cargo: loading, quantity and quality certificates, the bill of lading and the invoice.
Payment per cargo
Documents are presented and paid cargo by cargo, against compliance with the instrument.
Where these deals stall
- —The buyer negotiates with an intermediary who has no line to the people responsible for supply at the seller.
- —The seller's forms are filled in incompletely, and the file comes back for corrections.
- —The money flow or the corporate structure raises questions at the bank after the contract is drafted instead of before.
- —The offer's validity runs out while the parties argue about the price.
Checklists by deal step
Have a deal in this commodity?
Send us the offer or the structure. We reply within two business days.