A Deep Analysis on Price Formation, Price Revision and Re-Opener Clauses

July 6, 2017 1:30pm

Pierre Vergerio
Edison SpA

Gaurav Sharma
Three Crowns

Serena Hesmondhalgh
Brattle Group

  • How the price formation is changing in LTC?
  • Main components of the formulae you need to establish during negotiations
  • What the right price for Long Term Contracts should be? How should it be determined?
  • What should be have been the most relevant changes in the pricing mechanisms? What should be the optimum pricing mechanism?
  • Challenges of setting Long Term expectations for prices in a contract: finding ways to have the flexibility to adjust to important changes in the market
  • Are the parties enabled to amend the pricing terms to the new changed environment throughout the contract terms?
  • What is/is not a Price revision clause?
  • What is possible with a price revision clause? Do Changes in price imply changes in other provisions?
  • Renegotiating price revision clauses that were agreed at the time where the people who were agreeing them could never foresee the future as it is today
  • Is there a price revision case in which an existing oil-index formula will be changed to 100% hub price on the basis of a pure price revision clause?
  • What is in reality the ability of parties to re-open price?
  • What are the price re-opening mechanisms for existing contracts that are currently enforced?
  • Price re-adjustment clause: how do you calculate the new price?
  • How to identify and build a different pricing systems depending on where and what the natural gas is going to be used for?
  • How to negotiate a lower price and differentiated price structure i.e. new indexation that reflects the value of LNG instead of the value of oil?
  • How to resolve the expectation gap between sellers and buyers arising from the mutually acceptable price via negotiation?